Preamble

The House met at half-past Two o'clock

PRAYERS

[MADAM SPEAKER in the Chair]

Oral Answers to Questions — DEFENCE

The Secretary of State was asked—

Territorial Army

Mr. Brazier: What steps he is taking to ensure that Territorial Army units can continue to conduct unit-level exercises and participate, as units, in formation-level training. [16794]

The Minister for the Armed Forces (Dr. John Reid): Territorial Army units take part in a minimum of six days collective training each year and two of those are spent on a unit or formation-level exercise. The future training requirement for TA units will depend on the outcome of strategic defence review work into the future size and shape of the Regular and Reserve forces.

Mr. Brazier: Is the Minister aware that such unit and formation-level exercises attract and retain the best-quality people in the TA? Is it true that an admiral has been asked to head the relevant strategic defence review team which will conduct the Reserve forces study?

The Royal Navy has so run down the resources for its own Reserve that it is now almost the worst-recruited section of the Reserve forces.

Dr. Reid: In response to the first part of the hon. Gentleman's question, we recognise the importance of collective training for individuals. The TA units took part in four formation-level exercises this year, compared with two last year, and four are planned for next year. We shall obviously bear that in mind during the strategic defence review considerations.
As regards the make-up of the project team, senior personnel at two-star level have been given the task of overseeing each of the main project areas under consideration in the strategic defence review. The study on the Reserves is being conducted by a mixed civil and military team and includes the Director of Reserves and Cadets, Richard Holmes, whom I shall see tomorrow as part of those discussions. Brigadier Holmes and that group are overseen by an assistant chief of the defence staff programmes, who, as the hon. Gentleman says, is an admiral, but is also a purple post.

Mr. Edwards: May I remind my hon. Friend that the oldest Territorial regiment in the British Army is the Royal Monmouthshire Royal Engineers, based in Monmouth in my constituency? Does he agree with me that the outstanding work that it has performed in Bosnia recently demonstrates the important operational role that the Territorial forces can play following the strategic defence review?

Dr. Reid: I thank my hon. Friend for that observation. I am sure that the whole House will join me in paying tribute not only to the generality of the TA, but, in particular, to the Royal Monmouthshire Royal Engineers. We particularly recall those who have done and continue to do such sterling work in areas such as Bosnia. We are truly fortunate to be able to call upon such dedicated, professional and highly motivated individuals who make up the voluntary Reserves. We are intent on ensuring that their use is as flexible as possible. Indeed,


only today, a reservist officer has been called up for service with UNSCOM in Iraq, which again demonstrates the flexibility and utility of our Reserve forces.

Royal Engineers

Mrs. Roe: If he will make a statement on the (a) financial and (b) service personnel impact for the Royal Engineers of his Department's land mines strategy. [16795]

The Secretary of State for Defence (Mr. George Robertson): Our land mines strategy will have no significant impact on the operating costs or manpower of the Royal Engineers. I am pleased to say that they will be playing a direct role in the Mine Information and Training Centre at Minley.

Mrs. Roe: I am grateful for that reply. Does the Minister envisage that Royal Engineers personnel will play a more active role on the ground in mine clearing overseas?

Mr. Robertson: In peacetime, it is not the role of our soldiers to get involved in humanitarian mine clearing, although they have considerable expertise in the clearance of areas following conflicts. I assure the hon. Lady, and I am proud to say, that the Royal Engineers will play a distinguished part in the work of the Mine Information and Training Centre. Its expertise and knowledge will be used in Government and non-governmental organisations to ensure that the task of humanitarian de-mining, which is of such great importance in the world today, is conducted in the most professional and expert way possible.

Mr. Savidge: With the Ottawa treaty being signed this Wednesday, does the Secretary of State agree that we should now be concentrating on the task of ridding ourselves of those land mines that have already been sown? Will he tell us more about what the Government will be doing to assist those involved in the humanitarian task of de-mining?

Mr. Robertson: My hon. Friend is absolutely right. A significant moment in history will occur on Wednesday when my right hon. Friend the Secretary of State for International Development will be in Canada to sign the Ottawa treaty, which will ban the export, import, transfer, manufacture and, ultimately, use of anti-personnel land mines. That, in itself, is one step in the direction in which, I believe, the world wishes to go.
All across the globe there are the legacies of previous conflicts—areas that cannot be walked on owing to the potential terrible, wanton destruction of anti-personnel land mines that lie in the way of so many civilians. I am pleased to say that British Army expertise is to be used at a much greater level to assist in that project. Already, British troops have been involved in helping to rid parts of the world of the scourge of land mines. Those areas include Afghanistan, Angola, Belize, Cambodia and Cyprus. This country played an important part in establishing the United Nations mines action centre in Bosnia. We shall play our part and I hope that other countries will do the same.

Mr. Martin Bell: Is the Minister aware that the position of the head of his Department's humanitarian

mine clearance is as yet unfilled and there is a sense of urgency and concern in the mine clearance community that it should have been filled earlier?

Mr. Robertson: I can assure the hon. Gentleman that, in every area where there is concern on humanitarian de-mining, we are moving with expedition. My visit to Bosnia was designed to highlight a new five-point programme on humanitarian de-mining. Colonel Alastair McAslan has been nominated as the British Army's representative on humanitarian de-mining. We are fulfilling all the obligations which, as a major military nation, we should.

Mr. Gerald Howarth: I hope that the Secretary of State had an interesting visit to the Royal School of Military Engineering at Minley in my constituency. I was interested to hear him say that he reckons that the centre of mine expertise will not have a significant financial impact. When it was announced in October, it was reported that it would cost £125,000 to set up the centre. Will that money come out of the defence budget or that of the Overseas Development Administration?

Mr. Robertson: Of course it will come from the defence budget, as it should, as it involves military de-mining. I hope that the hon. Gentleman is as proud as I am of the work that has been and will be done at Minley. The £125,000 is a good investment in the sort of jobs that will be done at that establishment by the Royal Engineers.

Former Prisoners of War

Mr. Gill: If Her Majesty's Government will repay to former prisoners of war the amount deducted from their pay on which they had paid taxes and which was not refunded to the German and Italian Governments in a post-war settlement. [16796]

The Parliamentary Under-Secretary of State for Defence (Mr. John Spellar): My decision on the review of officer prisoners of war and protected personnel pay deductions during the second world war was taken after very careful consideration of the submissions from ex-officer prisoners of war and protected personnel, and of the long and detailed report of the review, a copy of which is in the Library of the House. I concurred with the findings of previous Ministers that the contemporary evidence did not support the claims being made for further refunding of deductions.

Mr. Gill: The Minister will be aware that this matter was discussed in the House earlier in the year, when there was support for the plight of ex-officer prisoners of war on both sides of the House. They will be disappointed in the answer that he has just given to my question. One of those who will be disappointed will be my constituent, Squadron Leader B. A. James MC, who, along with thousands of other people in the same circumstances, feels that he has been ignored and treated very badly. This question has rumbled on since 1980 and it is disappointing to hear the Minister say that he is not prepared to review the matter. Those involved would like there to be an independent inquiry at which prisoners of war could express their evidence in a way that they have previously been unable to do.

Mr. Spellar: With respect to the hon. Gentleman, we have, as promised, reviewed the situation. I have gone


through a mass of documentation, including representations from ex-officer prisoners of war and protected personnel, and through the documentation produced by the Department. However, after full examination, I have to say that the case is not made, which is why we felt it right and proper to confirm the previous Administration's decision.

Mr. Dalyell: Roughly how many people and how much money are involved?

Mr. Spellar: There is considerable argument about several aspects of this matter, especially as much of it relates to records that no longer exist. All the issues were fully discussed in the House and fully examined by the then Government after the second world war and decisions were made on that basis. Successive Governments have gone through the information and confirmed those decisions because the case for doing otherwise has not been made.

Mr. Rendel: I understand that the Government accept that money was deducted from prisoners of war and should therefore have been paid back after the war; but that, now that they have lost all their records, it is impossible to go over the case once again and decide who should be paid and how much. Can we have an assurance from the Government that, at least, individuals who have kept their own records and can prove how much they lost will be paid back?

Mr. Spellar: The hon. Gentleman is not looking at the case. In reality, a number of those who came back after the war were refunded by the authorities. There was discussion about that at the time. In a number of other cases, camp funds were put together, but that is a separate issue. Many of those who had had moneys deducted and who were able to demonstrate that they did not receive the moneys in the camp got a refund after the war. All that forms part of the body of facts that we have established and gone through, which is why we made the decision.

Mr. Gibb: In preparing the report, what steps were taken to ensure that the first-hand experiences of the officers involved were reflected in that report? Is the Minister aware that those ex-prisoners of war, who served our country valiantly and selflessly during the last world war, feel strongly that they have been cheated and that they cannot get justice? Would it not be wiser to offer some consultation with them or, better still, to appoint an independent person to arbitrate on that matter?

Mr. Spellar: All hon. Members, this Administration and previous Administrations fully understand the tremendous contribution made by many of those individuals, both before they were taken prisoner and, in many cases, afterwards, when they tied up many German and Italian troops in trying to recapture escaping prisoners of war. That is common ground. When we move on to the question of whether deductions were adequately repaid, we find that many of the investigations took place immediately after the war, that the issues were discussed in the House of Commons and that parliamentary questions were tabled. At that time, contemporary evidence was closely examined, which is why the

previous Conservative Government made the decision that they did and why, having examined the evidence after having entered office after the general election, we had to concur with their finding.

Mr. Michael Jabez Foster: Will my hon. Friend accept that much of the evidence on which he relies was produced before the election of the Labour Government? Several of my constituents have written to me saying that they understood that they had no hope with the other lot, but that they hoped that fresh consideration would be given to this matter. Much of the evidence put to me and to my hon. Friends is new evidence, and I ask that it be reconsidered.

Mr. Spellar: Much of the evidence was considered by the Attlee Labour Government after the last war and the issues examined by those who were much closer to the evidence at the time. That evidence was re-examined by the previous Administration and by this Administration and, when we did it, we looked at a number of representations from those with an individual viewpoint, both officer POWs and protected personnel. We examined that evidence and compared it with the contemporary evidence and with the documentation. It was for that reason that we took our decision.

Royal Yacht

Mr. Godman: What recent representations he has received anent the future of the royal yacht Britannia. [16798]

Mr. Syms: If he will make a statement on the future of the royal yacht Britannia. [16802]

Mr. George Robertson: My Department has received a large number of approaches about Britannia's future. Seven substantive preservation proposals are being examined in detail. I should prefer the yacht to be preserved, providing that the use is fitting and that there can be adequate arrangements to ensure that her fine appearance can be maintained. I hope to be able to make an announcement shortly.

Mr. Godman: I am pleased that my right hon. Friend has decided to ignore the suggestion, or request, from Buckingham palace that the vessel be scuttled or scrapped. Does he agree that neither London nor Leith has a legitimate claim on her and that, in all fairness, she should go to the Clyde, to be berthed at the Govan dry dock close to the proposed science park? The ship should not finish up at the bottom of the Atlantic; she should be returned to the Clyde, where she was built.

Mr. Robertson: Buckingham palace has been kept closely informed of the options for the ship's future, and has made it clear that the decision should and will be taken by the Government. Britannia is regarded by most people as a national treasure. She has given 44 years of distinguished service to the Queen and the country. My preferred option is that the yacht should be preserved, but its use must be fitting and there must be adequate arrangements to maintain its appearance. All seven bids will be considered fairly and in detail, and we shall come to a conclusion in the near future.

Mr. Syms: May I press the Secretary of State further? When will he come to the House with a decision?


The public are greatly concerned that the yacht's use should be appropriate. May I make a plea for the south coast—particularly for Portsmouth, which has a very good claim to have the yacht berthed there?

Mr. Robertson: It is critical that we look at each of the proposals in some detail. I am concerned to preserve Britannia, and to ensure that her dignity and long-term future are absolutely assured. I shall take no prior view of which option is best. They will all be considered on exactly the same basis, and I hope to be able to make a decision shortly.

Mrs. Gilroy: The hon. Member for Poole (Mr. Syms) has just issued a plea for the south coast. It will not surprise my right hon. Friend if I rise to make a plea, backed by the representations, which I know that he has received, for Plymouth. I ask not only that the vessel be preserved but that, by means of a private finance initiative, she is kept in use. I hope that my right hon. Friend will give serious consideration to that idea, along with the other representations that he has received.

Mr. Robertson: I am not certain whether my hon. Friend made a slip of the tongue when she said Plymouth—perhaps she meant Portsmouth, as Plymouth has not entered a bid for consideration. We need to take a dispassionate and objective view of the proposals, and to consider all representations. I appreciate that there are strong views in each of the localities involved in the decision. They serve to underline the fact that there are strong feelings in the country that Britannia should be preserved. It is my responsibility to ensure that, if she is preserved, that is done in a way most fitting for the ship and for the country.

Mr. Hancock: Most of my constituents will be delighted that the Secretary of State shares their opinion and not the opinion of the Princess Royal, which was that the ship should be scuttled. Indeed, they have made a strong case for Britannia to go to her natural home, in Portsmouth. However, if the ship is to be kept as a national treasure, I suggest that that can be done only if the Government keep some control over her by providing a dowry to ensure that the ship is restored in the way most people would expect her to be.

Mr. Robertson: It has been made clear that there will be no call on public funds, but we must ascertain that in connection with any of the seven bids that are being considered. The Britannia will not be replaced or rebuilt; that decision is final. All the private finance options would have been viable only with substantial amounts of public money. I appreciate that, inevitably, the hon. Gentleman will favour the Portsmouth option, and it will be carefully considered among all the other options.
I look forward to being in Portsmouth next Thursday for the decommissioning of HMY Britannia.

Defence Diversification Agency

Jacqui Smith: If he will make a statement on the Government's plans for a defence diversification agency. [16799]

Mr. Spellar: Our aim is to fulfil our manifesto commitment to facilitate the wider application of defence

industry expertise to civil uses. Although I previously announced our hope to publish a Green Paper on this before Christmas, preparatory work has taken longer than anticipated. We now expect to publish the Green Paper early in the new year. However, I can assure the House that this remains a matter of the highest priority.

Jacqui Smith: I thank my hon. Friend for his assurance that this remains a priority, especially in the light of a survey of companies in my Redditch constituency with defence involvement, which suggested that, despite a reduction in their defence turnover, they believe that jobs could be preserved by defence diversification. What role will there be for the Defence Evaluation and Research Agency in the Government's plans for defence diversification? Will the Government learn from the experience of industries and other countries in that process?

Mr. Spellar: I thank my hon. Friend for raising the question of industries in her Redditch constituency, because many of those are the small and medium enterprises that are very much the core of our defence industry. Sometimes we concentrate too much on the prime contractors, to the exclusion of SMEs.
Obviously, I cannot go into all the details of the paper now but, in answer to my hon. Friend's question about the Defence Evaluation and Research Agency, we shall consider how to diffuse the technology and expertise in the agency into the wider economy. We shall study the experience of many of the major companies in this country that have diversified some of their activities, and the example of other countries—not least the United States—and the successful work that they have undertaken in diffusing defence technology more widely into industry.

Departmental Land and Buildings

Mr. Pike: What estimates his Department has made of the potential for disposal of its land and buildings over the next five years. [16800]

Mr. Spellar: In addition to forecast receipts this year of £140 million, we expect to receive about £200 million over the next two years for land and buildings that have already been identified as surplus. The strategic defence review is examining vigorously the scope for further disposals.

Mr. Pike: I thank my hon. Friend for that answer. Can he assure me that the review is as vigorous as possible, to ensure both that every possible piece of land and building that can be disposed of in the new defence situation that we are facing can be sold and the money realised for the nation and that use of large parts of our land will not be blocked?

Mr. Spellar: There has already been a considerable reduction in the defence estate. Further disposal will follow the identification of other areas. Of course we want to ensure that land and buildings are used to the maximum efficiency, not only to realise money for the defence budget but, quite properly, to ensure that land is available for regeneration and housing. Many local authorities are


discussing those matters with us and many hon. Members are approaching us with useful, imaginative and exciting ideas for the use of that land.

Mr. Viggers: Can the Minister give an undertaking that, when defence land is released, the broader range of issues will be taken into account? I think especially of land in my constituency at Royal Clarence yard, where the Ministry of Defence is proposing to retain nine and a half acres, which is central to the millennium project for the development of Portsmouth harbour. Will he ensure that the Ministry of Defence is given an assurance by Government generally that broader interests are taken into account?

Mr. Spellar: I thank the hon. Gentleman for that point. We try to take regeneration issues into account and to work with local authorities and other planning agencies wherever possible, but in many cases we must retain sites for strategic defence interests. We should not consider alienating that land if it were to the detriment of training or of the operations of the services. We are mindful of the need for regeneration and the ability, through that, to contribute to the regeneration of the whole country.

Sir George Young: Where land and buildings are surplus to the Department's requirements, will the Minister liaise closely with planning departments, such as those in Hampshire, to see whether the sites could be put to housing use, thereby reducing the threat of green-field development on which so many of his hon. Friends seem hellbent?

Mr. Spellar: I thank the right hon. Gentleman, who perhaps strayed into one of his previous incarnations in asking that question; but I take his point. We try to work with planning authorities at an early stage. That is important because it can facilitate the disposal of land, which can then be brought into effective use for the benefit of the community—with, incidentally, the best possible return for the defence budget.

NATO

Ann Clwyd: What assessment he has made of the cost to Her Majesty's Government of NATO expansion. [16801]

Mr. George Robertson: Our assessment is that the costs associated with the enlargement of NATO to include Poland, Hungary and the Czech Republic will be manageable. I and other NATO Defence Ministers will be considering tomorrow a report from NATO staffs on the military and financial implications of enlargement.

Ann Clwyd: I thank my right hon. Friend for that answer, but I have been asking the question for some time and I would have expected the Government to have been able to give an assessment of the costs of NATO expansion by now. Can he assure us that the cost of expansion will be met from the current defence budget and that he will not be asking for an extra penny from what many of us already consider to be much too large a budget?

Mr. Robertson: Any additional cost to our NATO subscription arising from enlargement will be met from

the defence budget. Currently, that subscription costs 1 per cent. of the funds allocated to the defence budget. I believe that NATO is worth every penny that we spend on it.
I have just told my hon. Friend that, tomorrow, Defence Ministers will receive the report from NATO on its assessment of the cost of enlargement. I would be most surprised if NATO expenditure were to rise significantly in real terms. There will certainly be a cost, but we believe it to be manageable and we shall pay our contribution.

Sir Geoffrey Johnson Smith: Will the right hon. Gentleman confirm that there is no pressure on Poland, Hungary or the Czech Republic to spend huge sums trying to integrate into NATO? Will he also confirm that there is no pressure on us and no urgent requirement beyond what might be described as command and control procedures, integrated air defence and so on?

Mr. Robertson: I assure the right hon. Gentleman that the cost of NATO enlargement will be spread over a considerable period. For the new countries—the invitees to the membership of NATO—participating in collective defence is preferable to, and cheaper than, attempting to provide the same security on a national basis. Any nation—ours as well as the new countries—must be secure before it can do anything. Inevitably, the new countries would have been involved in assuring their future security by expenditure on military capability. Our country has been able to live in peace and security for almost half a century because of our membership of NATO. It is clear that the 12 nations that have applied for membership did so because they wanted the same.

Mr. Llew Smith: What savings would come to the United Kingdom if we were to link our defence expenditure to the average of other western European countries?

Mr. Robertson: I do not believe that we should link our defence expenditure to any average or any particular figure. This country should be defended strongly and it should be defended well. It is important that we establish the priorities for our country not only as a nation, but as a partner in NATO and a member of the United Nations Security Council. We make our own decisions. That was the position taken by the Labour Government in 1945 when they took Britain into NATO, and it is the position taken by the Labour Government who were elected this year.

Sir George Young: The hon. Members for Cynon Valley (Ann Clwyd) and for Blaenau Gwent (Mr. Smith) asked about the size of the budget. Does the Secretary of State agree with what the Chancellor of the Exchequer said in last week's pre-Budget statement: that defence is not a priority?

Mr. Robertson: The right hon. Gentleman knows that the Labour party was elected on a manifesto that said that we would assure the strong defence of this country. Of course it is a priority and it will remain so. This nation's defence is safe in this Government's hands.

Heavy Lift Transport Aircraft

Mr. Wilkinson: What assessment he has made of the adequacy of heavy lift transport aircraft in Royal Air Force service. [16804]

Dr. Reid: Our strategic lift requirements, in terms both of air lift and of sea lift, are being scrutinised closely in the strategic defence review, which aims to ensure that our armed forces are properly equipped to undertake their tasks. That scrutiny is, of course, informed by my Department's assessment of the adequacy of our currently available assets.

Mr. Wilkinson: I am grateful for that answer. In peace maintenance as in war fighting, is it not important to get to the critical spot firstest with the mostest, particularly when the United Kingdom is increasingly withdrawing from overseas bases? Will the Minister therefore assure the House that, after the review, the RAF will be able to procure at the earliest possible date a proven aircraft—the C17, which can carry a main battle tank and has been an admirable aeroplane in the United States air force?

Dr. Reid: The hon. Gentleman, who is well known for his interest and expertise in these matters, is absolutely right about the nature of the threats we now face. The old simplicities and certainties of the cold war have gone. We live in a more volatile, less predictable world and our ability to react quickly is paramount. It is also important that we have a variety of equipment, which the RAF cannot, at present, move by air. My right hon. Friend the Secretary of State has been at pains to make that point. Several options merit consideration, including, perhaps, the future large aircraft and C17.

Mr. McCabe: When considering the future of RAF heavy lift, will my hon. Friend ensure that adequate attention is paid to preserving aircraft that have served us well, particularly as we approach the millennium?

Dr. Reid: That is absolutely correct. I am pleased to say that, today, I presented a charter mark award to the RAF museum, which has played such an important role in maintaining and exhibiting our RAF heritage. I am also pleased to tell the House that, Treasury and Parliament permitting, as of today the RAF intends to pass the ownership of the vast majority—121 out of 122—of its historic aeroplanes to the RAF museum, thus showing our confidence in it and our commitment, as we approach the millennium, to retaining the heritage of past generations of the RAF for future generations.

Regiments

Mr. Robathan: What assessment he has made of the importance of the regimental system. [16805]

Dr. Reid: The strategic defence review's examination of the future structure of the Army is taking full account of the recognised strengths of the regimental system. It would, however, be premature for me to speculate on any particular aspect of the review's outcome.

Mr. Robathan: I welcome the Minister's statement because I know that he is personally committed to the

regimental system. Will he ensure that the strategic defence review does not undermine the system, which is one of the strengths of the British Army? Does he agree that the current selection procedures throughout the armed forces and in regiments are based on merit and not anything that is politically correct?

Dr. Reid: I whole-heartedly agree with the hon. Gentleman on both statements.

Mr. Davidson: Does my hon. Friend agree that tradition in the regimental system can be a burden as well as a benefit? What steps will he take to ensure that regimental traditions that restrict access to the officer class are swept away? In particular, what steps is he taking to ensure that youngsters who are not from public schools can become officers and, say, guards in the cavalry regiments?

Dr. Reid: I have the utmost respect for the esprit de corps, the ethos and the almost concrete capacity of the regimental system to instil the will to fight in men—and, I hope, women—in the most difficult circumstances. As for the second part of my hon. Friend's question, we have made it clear that we want the best and the brightest in the British armed forces. We want the widest possible pool of recruits and we want the pathways to progress in the armed forces to be open to all, irrespective of sex, ethnic background or social class. We shall maintain that commitment.

Mr. Key: On how many occasions since 1 May has the chain of command's responsibility for military discipline been the subject of intervention by Ministers, including the Lord Chancellor?

Dr. Reid: As far as Defence Ministers are concerned, none. I hope that the hon. Gentleman recognises, when he makes such imputations, that although he may be attempting to slur the Government Front Bench, he is also—wrongly—bringing into question the integrity of those in the Army chain of command, who would never allow such a thing. As for the hon. Gentleman's reference to the Lord Chancellor, I have no intention of commenting on internal advice or correspondence between Ministers, which I have already withheld under exemption 2 of the code of practice on access to information. The hon. Gentleman should know that that is always the position taken on such matters.

Ethnic Minorities

Mrs. Mahon: What steps his Department is taking to improve levels of recruitment from the United Kingdom's ethnic minorities. [16806]

Dr. Reid: Our aim is that the armed forces should fully embrace diversity and better reflect the ethnic composition of the society they defend. I am glad that all three services are tackling the issue with considerable energy, and that a number of local initiatives are in place. Complementing those are the tri-service initiatives in Newham and Sandwell and the Army's specific ethnic minorities recruitment campaign.

Mrs. Mahon: Does my hon. Friend agree that the number of men and women from our ethnic minorities who serve in the armed forces is disappointingly low? I think that it is about 1 per cent. I welcome the Army's new recruitment initiative. What are the other two services doing?

Dr. Reid: I agree with my hon. Friend. She will know that we are determined to ensure that access to our armed forces is open to the widest possible reservoir of talent. She may be aware of our initiatives in Newham and Sandwell. She will also be aware that the Ministry of Defence is 19 months into a five-year action plan with the Commission for Racial Equality. I welcome the recent initiative of the Chief of the General Staff, who introduced a series of measures to combat racism in the Army whenever it raises its head. I am glad to announce that the Army and the Royal Air Force are today introducing a confidential support hotline for counselling and advice on such matters. It will operate outside the chain of command and has the support of the chiefs of the services and the chain of command.

Mrs. Virginia Bottomley: I welcome the Minister's comments. I urge him to meet the chairman of the Greenwich foundation for the Royal Naval college to discuss the options for ethnic minority recruitment. Will he also reassure us that the delay and the buck passing will come to an end and that the outstanding questions will be resolved so that that jewel in the nation's heritage is properly established and occupied in time for the millennium?

Madam Speaker: Order. That question does not have much to do with recruitment.

Mrs. Bottomley: Yes, it does.

Madam Speaker: Not in my judgment.

Mr. Menzies Campbell: Is not one of the least attractive features of bullying in the armed services the fact that it is often related to racism? That provides a substantial disincentive for people from the ethnic minorities to join any of the armed services. Should not such matters be the responsibility of the chain of command? Is it not clear that if there is bullying and racism in any unit, the ultimate responsibility must rest with the commanding officer of that unit?

Dr. Reid: I am not sure whether the hon. and learned Gentleman was here when I praised the chain of command and the chiefs of staff for the proactive, dynamic and absolutely committed way in which they have approached racism and bullying in the armed forces. I have no hesitation in saying that this is not being pushed as a political imperative on the chiefs of staff; it is a measure to which they are individually and collectively committed. I congratulate them on that. It is also a matter for congratulation that they have introduced, for the purposes of counselling, an independent hotline, which will serve as another building block to combat racism in the armed forces.

Trident

Mr. McAllion: How many representations his Department has received on the Trident nuclear weapons system since 1 May; and how many (a) supported and (b) opposed retention of Trident. [16808]

Mr. George Robertson: We have received more than 150 letters and submissions about our nuclear deterrent since inviting public contributions to the strategic defence review. The majority have called for Trident to be included in the review. We have already made it clear that the review will examine all aspects of our deterrent postures to ensure that it meets changing strategic circumstances.

Mr. McAllion: My right hon. Friend will recall that retaining Trident was a manifesto commitment of both Labour and the Tory party at the general election. Will he acknowledge that it is, at the very least, open to interpretation whether the British people embraced Trident by voting Labour in or rejected Trident by voting the Tories out? Given that uncertainty, will he take on board the latest polling evidence, which shows that 63 per cent. of British people believe that money spent on Trident is wasted public expenditure and that 59 per cent. of British people believe that this country would be much safer without nuclear weapons altogether? If we really are the people's Government, why do we not listen to the people and rid ourselves once and for all of these obscene weapons of mass destruction?

Mr. Robertson: I should point out that the competition to my hon. Friend in Dundee, East came not from the Tory party but from the Scottish National party, which was in favour of abolishing Trident—and that my hon. Friend won and the SNP lost. Does not that suggest that people are in favour of Trident? Whatever is the preponderance of letters in the postbag or the outcome of occasional opinion polls, people believed what we said in our manifesto and they have every right to believe that we will conduct ourselves differently from the previous Government.
The retention of Trident was one of the policy principles on which we will base our work in the strategic defence review, but within that framework the review will look at all aspects of our current deterrence requirements, including nuclear warhead numbers. We are committed to the global elimination of nuclear weapons. There might be some differences on how we get to that point, but the British people were in no doubt when they voted for my hon. Friend and me in the general election.

Dr. Julian Lewis: I welcome that robust response from the Secretary of State. Is he aware that, throughout the 1980s and early 1990s, when anxiety about nuclear deterrence was at its height, the Campaign for Nuclear Disarmament consistently produced strangely worded poll questions to get results such as that which has just been cited, but that whenever the British public were asked: "Do you think that Britain should continue to possess nuclear weapons as long as other countries have them?" poll after poll showed two thirds of British people in favour of retention and never more than a quarter against it?

Mr. Robertson: I am not concerned with the ups and downs of individual opinion polls. After many years of


deep consideration, the Labour party came to the electorate with an absolutely clear commitment to the retention of the Trident submarine fleet and with a much more urgent and determined attitude to arms control—especially nuclear arms control—than any previous Government. That is one reason why we were so emphatically returned at the general election.

Armed Forces (Women)

Laura Moffatt: What steps his Department is taking to expand employment opportunities for women in the armed forces. [16809]

Dr. Reid: Women already make a substantial contribution to the armed forces and serve alongside their male colleagues in many roles. My right hon. Friend the Secretary of State announced in a defence debate on 27 October that, from April next year, the proportion of posts open to women in the Army will rise from 47 to 70 per cent. We have also commissioned a review that will enable us to decide whether any of the remaining restrictions on employment opportunities for women in all three services can be reduced or removed.

Laura Moffatt: I thank my hon. Friend for that answer. Does he agree that women have always proved themselves—especially in Bosnia, as I have witnessed—able to take part in the armed forces? Does he agree also that women are capable of taking part in combat roles in the Royal Navy? Does not that put paid to the claim that women are not suitable and that such roles are suitable only for the chaps? Thank you.

Dr. Reid: It is a pleasure. The Government, as my hon. Friend would expect, and the armed forces are committed to expanding career opportunities for women. My hon. Friend may be interested to know that service women now represent 7 per cent. of total strength and that in the 12 months to 1 September 1997 14 per cent. of new recruits were women. As I said earlier, my right hon. Friend the Secretary of State announced on 27 October that from 1 April next year the proportion of posts in the Army open to women will increase to 70 per cent.
I am glad to say that the Ministry of Defence has a good working relationship with the Equal Opportunities Commission. Later today I shall meet Kamlesh Bahl, its chairwoman, to see how much further we can expand opportunities for women in the armed forces.

Oral Answers to Questions — CHURCH COMMISSIONERS

The hon. Member for Middlesbrough, representing the
Church Commissioners, was asked—

Ethical Investments

Ann Clwyd: What assessment he has made of the impact of the contacts between the Church's ethical investment working group and GEC on GEC's arms exporting policy. [16829]

The Secretary of State for the Home Department (Mr. Jack Straw): In the absence of my hon. Friend the

Member for Middlesbrough (Mr. Bell), I am answering these questions as a Church Commissioner and as the member of the Cabinet with responsibility for Church matters.
The commissioners believe that the impact has been positive. The ethical investment working group put four questions to the company at its annual general meeting on 5 September as an encouragement to GEC to disclose hopeful information in a public arena about its defence-related business. The group will continue to inform itself about GEC's business strategy and will maintain contact with the company.

Ann Clwyd: I am grateful to my right hon. Friend for that answer. May I put it to him, however, that since the so-called dialogue began, GEC has continually expanded its defence manufacturing and increased its exports to Indonesia—a country with one of the worst human rights records? Is there any point in this dialogue if that is the result?

Mr. Straw: I think that there is. It is fair to say that the commissioners are now being much more proactive about their investments in pursuit of their approach not to invest in any company whose main business is in armaments, gambling, breweries, distilleries, tobacco or newspapers.
I understand that, over the past three years, GEC's exports to Indonesia have totalled only £20 million and comprised simulation and training equipment for the navy, short-wave broadcasting equipment for the national network, transmitters for commercial broadcasters and five omniphones.

Mr. Burns: Does the Home Secretary appreciate that, in a constituency with four GEC companies in it, a distinction must be drawn between weapons and weapons systems that are produced for the bona fide defence of a country from external attack and weapons such as land mines, that are universally condemned?

Mr. Straw: The hon. Gentleman makes an entirely fair point. Speaking not as a Church Commissioner but as the Member of Parliament for Blackburn, I must tell the House that many of my constituents' jobs depend on defence contractors. It is also fair to add that NATO countries account for some £2 billion of the £2.4 billion—85 per cent.—of GEC defence sales.

Pensions

Mr. Bill O'Brien: What assessment the Church Commissioners have made of the impact of pension provisions on the number of people applying for a career in the Church since Parliament approved the current pension provisions. [16831]

Mr. Straw: This is not strictly a matter for the Church Commissioners. I understand, however, from the advisory board of ministry that the number of candidates recommended for training for the ministry increased significantly in 1996 and this year. Confidence in the Church's arrangements for funding the ministry may have played a part in this encouraging development.

Mr. O'Brien: Does my right hon. Friend accept that it is time that the Church Commissioners took far more


interest in ensuring that those who serve in the Church receive proper pensions and other rights? I consider that they are entitled to the same pension rights as Members of Parliament. I hope that the Church Commissioners will take some interest in the future of those who serve in the Church.

Mr. Straw: I shall ensure that my hon. Friend's remarks are passed on to the commissioners who deal directly and professionally with the issue. It is reasonable to point out that the number of people recommended for training was 420 in 1995, 453 in 1996 and 486 so far in 1997. The Church Commissioners are concerned to maintain the funding of clergy pensions and that is why they have made new arrangements. From 1 January next year, dioceses will meet the cost from funds provided by parishes of all clergy pension rights for future service, but not for past service. That is being done not least so that the commissioners can ensure the future funding of stipends in needy areas.

Mr. Sayeed: In his Budget, the Chancellor 0069mposed a £5 billion tax on pensions. How much will it cost parishioners to fund that tax?

Mr. Straw: I think that the hon. Gentleman is talking about changes to advance corporation tax. The cost to the Church Commissioners will be £12 million per annum in 1997 values. The commissioners tell me that they welcome the time allowed by the Government to plan for the removal of ACT relief and the phasing of its impact between 1999 and 2004.

Oral Answers to Questions — PUBLIC ACCOUNTS COMMISSION

The Chairman of the Public Accounts Commission
was asked—

National Audit Office

Miss McIntosh: How many lawyers are employed by the National Audit Office. [16832]

Mr. Robert Sheldon (Chairman of the Public Accounts Commission): The National Audit Office does not employ staff as lawyers, although 10 graduates in law are employed by its auditors. The National Audit Office obtains legal advice as required from various sources including commercial firms and the Treasury Solicitor.

Miss McIntosh: Is any of those people sufficiently qualified in public procurement contracts for tender under European Union regulations? Was any of them consulted before the contract was awarded for the refurbishment of Canary Wharf prior to the recent Anglo-French summit?

Mr. Sheldon: There is a big difference between the way in which auditors are employed by the National Audit

Office and the way in which they are employed on the continent. In other countries, auditors have legal representation because they regard that as rather more important than the auditing function. The hon. Lady should understand that the Public Accounts Committee looks at value for money extremely well. I am sure that its Chairman, the right hon. Member for Haltemprice and Howden (Mr. Davis), will want to satisfy himself that that continues to be the case.

Oral Answers to Questions — DEFENCE

The Secretary of State was asked—

Persian Gulf

Mr Waterson: What is the level of Her Majesty's forces currently deployed in the Persian gulf. [16810]

Dr. Reid: UK forces currently deployed in the Gulf consist of HMS Coventry, supported by Royal Fleet Auxiliary Bayleaf, as part of the Armilla patrol. Shore-based forces in the Gulf area comprise six RAF Tornado aircraft operating from Saudi Arabia, supported by two RAF VC10 tankers in Bahrain, which contribute to the enforcement of the no-fly zone over southern Iraq. A UK battalion is currently exercising in Kuwait as part of a routine training programme.

Mr. Waterson: I thank the Minister for that answer. Will he confirm that, as long as there is a perceived threat in the region, this country will continue to maintain similar forces? Does he agree that the current regime in Iraq is all too willing to perceive as a sign of weakness any reduction in our forces or those of our allies in the area? That is another good reason for maintaining the current level of availability of British forces in the region.

Dr. Reid: Yes, we have made absolutely plain our concern about the potential existence and use of weapons of mass destruction in Iraq under the control of Saddam Hussein. That is why we have made it clear throughout this period that although we have of course sought, and will continue to seek, a diplomatic solution, we will not rule out the use of force. As the hon. Gentleman will know, HMS Invincible remains in the Mediterranean, ready to respond at short notice, giving the UK flexibility in the near future should Saddam's promise of co-operation with UNSCOM prove illusory.
The hon. Gentleman may also be aware that in the past few days my right hon. Friend the Secretary of State for Defence visited HMS Invincible to speak to the men and women who are serving on that aircraft carrier and who will be discharging the responsibility of this country in the efforts of the international community to ensure that the will of the United Nations cannot be thwarted and that the danger and menace of weapons of mass destruction is not held over the head of the global community.

Points of Order

Mr. Nigel Evans: On a point of order, Madam Speaker. Following the actions of Welsh fanners in Holyhead last night, has the Secretary of State for Wales asked to make a statement to the House today? I make it plain that I cannot condone the actions of those farmers—we could never condone such illegal actions—but the Secretary of State should answer some pertinent questions about the problems that those farmers face.
For example, recent figures show that there has been at least a 30 per cent. drop in the incomes of Welsh farmers, a strengthening of the green pound because of the Government's economic actions, and a £16 million clawback of the hill livestock compensatory allowance payments to farmers in less-favoured areas—all this at a time when money is generally being made available because of the ewe premium rebate, which should be coming back to support Welsh farmers.

Madam Speaker: Order. The hon. Gentleman is now getting into a policy argument. I let him continue because I wanted to check when Welsh questions were—they happen to be on Wednesday.

Several hon. Members: rose—

Madam Speaker: Order. I have not yet finished. The question was whether the Secretary of State for Wales had asked to make a statement. The answer is no, I have not been informed that he is seeking to do so. The hon. Gentleman raised a lengthy point of order—I hope that those on the Government Front Bench have taken note of it and that the House has noted that Welsh questions are on Wednesday.

Mr. Julian Brazier: On a point of order, Madam Speaker. My question relates to the tabling of oral questions. I understand from the media that the Lord Chancellor has let it be known that he sees himself as having a new co-ordinating role across Government Departments as, in his words, "a new Cardinal Wolsey". If we wish to question him on that matter in the Chamber, should we do so through his Parliamentary Secretary or through the Department concerned? He appears to have started with the Ministry of Defence.

Madam Speaker: As the hon. Gentleman knows, I am not responsible for the rota of when Ministers answer questions. That is determined through the usual channels. It is for the individual Member to determine which Minister is responsible for answering the question that is tabled. If there are any problems, I know that the Clerks in the Table Office will provide guidelines and as much help as possible.

Mr. Paul Tyler: On a point of order, Madam Speaker. I do not want in any way to quibble with your response to the hon. Member for Ribble Valley (Mr. Evans), but I would want to raise under Standing Order No. 24 the issue that has been concerning us overnight. It is a matter not just for Welsh Ministers but for the whole of the rural community, the whole of the United Kingdom and all of us who represent agricultural

constituencies. I would suggest that when patient people such as British farmers resort to civil disorder on the scale that they have, it is a very serious matter and, although we would not wish to condone their action, we should have an opportunity to debate it in the House.

Madam Speaker: I remind the hon. Gentleman, and all those who might want to touch on this subject, that there was ample time before 12 o'clock today to make an application under Standing Order No. 24. I have made my views known on the matter. I want no further points of order on the issue; I have dealt with it as far as it is my responsibility to do so.

Miss Anne McIntosh: On a point of order, Madam Speaker. I fear that there may have been a misunderstanding in the reply of the right hon. Member for Ashton-under-Lyne (Mr. Sheldon) to my question during Question Time.
I have put the same question to the Prime Minister. He has been asked about the costs of refurbishing Canary Wharf for the Anglo-French summit. To my knowledge, he has not replied. The point that I was trying to make in Question 35 was that we are obliged, under European law—

Madam Speaker: Order. The hon. Lady is trying to extend Question Time. She asked how many lawyers are employed by the National Audit Office. I cannot extend Question Time.

Mr. Damian Green: On a point of order, Madam Speaker. Has the Chancellor of the Exchequer given you any indication that he wants to make a statement on the tax-avoidance schemes of the Paymaster General, especially since the Chancellor appears to have changed Government policy on the issue without informing the House? At last year's Labour party conference, the Chancellor said:
A Labour Chancellor will not permit tax relief to millionaires in offshore tax havens.
He should tell the House whether that still applies to all millionaires or only to millionaire Treasury Ministers.

Mr. Bernard Jenkin: Further to that point of order, Madam Speaker.

Madam Speaker: Yes, I will hear a further point of order. I want to deal with this matter.

Mr. Jenkin: Do you agree, Madam Speaker, that, if a matter is of sufficient importance that it requires a Minister to rush out a statement clarifying why there has been a change of Government policy, that statement should be read out in the House by the Minister? Therefore, should not either the Paymaster General or the Chancellor of the Exchequer come to the House to clarify Government policy?

Mr. Dennis Skinner: rose—

Madam Speaker: No, I can deal with this, thank you very much, Mr. Skinner.

Mr. Skinner: Further to that point of order, Madam Speaker.

Madam Speaker: All right. It is fair enough to hear one from the Government Benches.

Mr. Skinner: I remember that, in years gone by, when the Tories were in power, I used to try might and main to find out just what had happened to the £65 million concerning the then Deputy Prime Minister, the right hon. Member for Henley (Mr. Heseltine)—where he had got it, where he had put it, who was in charge of it. I got the brush-off from the Speaker at the time.
What is more, I saw in the papers at the weekend that the shadow Chancellor of the Exchequer, the right hon. Member for Hitchin and Harpenden (Mr. Lilley), was to ask a question about the matter. Well, he is not present. I can only assume that he is still in his French investment over the channel.

Madam Speaker: I assure the hon. Member for Bolsover (Mr. Skinner) that he is not likely to get the brush-off from me.
On the very serious point, any hon. Member on either side of the House who believes that a Minister has acted outside Government guidelines should make representations to the Prime Minister, who is responsible for ministerial guidelines covering all Ministers. I hope that, if there is any thought of that in relation to this issue, hon. Members who are concerned will make proper representations, with evidence, to the Prime Minister.

WELSH AFFAIRS

Motion made, and Question put forthwith pursuant to Standing Order No. 107 (Welsh Grand Committee),
That the matter of government expenditure in Wales in 1998–99, being a matter relating exclusively to Wales, be referred to the Welsh Grand Committee for its consideration—[Mr. Clelland.]

Question agreed to.

Opposition Day

[5TH ALLOTTED DAY]

Welfare, Pensions and Disabled People

Madam Speaker: I should inform the House that I have selected the amendment in the name of the Prime Minister.

Mr. lain Duncan Smith: I beg to move,
That this House deeply regrets the unnecessary delay to proposals on pension and welfare reform; finds it inconceivable that having attacked reductions to lone parent benefits proposed by the previous Government this Government now plans to implement the same reductions; and urges the Government to take this opportunity to reassure people with disabilities that they will not tax Disability Living Allowance or transfer disability benefits from disabled individuals to bureaucracies such as local government's social services departments.
The debate is timely not only because of the internal Labour rows over cuts to lone parent benefit but because, after seven months in office, it affords us an opportunity—

Mr. Denis MacShane: What rows?

Mr. Duncan Smith: The real rows come from among the hon. Gentleman's friends and all those sitting on the Back Benches behind him.
With briefing, counter-briefing and leaks, the Department for Social Security is developing a sense of confusion which bodes ill. The Secretary of State and her party came to power on a promise—among many promises—of large-scale pension and welfare reform. The Prime Minister established that as one of his main priorities. He said that his Ministers would "think the unthinkable" and
end welfare as we know it.
In office, the Prime Minister reaffirmed that commitment as recently as October. He said:
We need to invest more as a country in savings and pensions. But Government's role is going to be to organise provision—like new stakeholder pensions—not fund it all through ever higher taxes.
He was equally explicit about welfare. He said:
it means fundamental reform of our welfare state, of the deal between citizen and society
I shall deal with pensions first. After the Labour party's scurrilous attack during the general election campaign on basic pension plus—which was essentially a proposal for discussion, not dissimilar to a Green Paper—it was legitimate to expect that the new Government were ready to move fast on pensions. One would think that they had an alternative, but apparently they did not.
Expectations were underlined by the appointment in May of the Minister of State, the right hon. Member for Birkenhead (Mr. Field), who is in his place. He was the Prime Minister's personal appointment and carries the unprecedented title of Minister for Welfare Reform. Given the amount that he has written on the subject in


the recent past, the country would have been forgiven for expecting an early Green Paper on pensions. After all, the very phrase "stakeholder pension" is one which he coined in his pamphlet "How to pay for stakeholder welfare".

Mr. MacShane: I am grateful to the hon. Gentleman. He was the author of a notorious pamphlet in 1993, which struck a chill into the heart of every pensioner in the country, for the No Turning Back group, that ultra-rightwing, reactionary Thatcherite group. [HON. MEMBERS: "He is reading."] I am reading because I am quoting. In that pamphlet, the hon. Gentleman proposed that people be allowed to opt out of their basic state pension. Is that still his policy—yes or no?

Mr. Duncan Smith: I am grateful to the hon. Gentleman for raising that point and I am pleased that he has bothered to read my pamphlet. I have been waiting some time for him to get round to it. The Secretary of State for Social Security might do well to read it herself. The answer to the hon. Gentleman's question is that pension reform requires one to consider all aspects—

Mr. MacShane: Answer the question.

Mr. Duncan Smith: The hon. Gentleman should listen to the answer. I do not resile for one moment from the idea that, as the Prime Minister said, pension reform requires one to think the unthinkable. Ministers are doing very little thinking, unthinkable or otherwise. What I wrote in 1993 went further towards pension reform than anything that Ministers have produced.
The pamphlet by the Minister for Welfare Reform is very interesting, and the hon. Member for Rotherham (Mr. MacShane) should read it. He might be interested to find out what the Minister's opinions are. The pamphlet was the product of a number of years' thought on how to provide second pensions for all, and such thought was also evident in other pamphlets such as "Private pensions for all: squaring the circle" and "A national savings plan", which was about universalising private pension provision.
Those pamphlets emerged before the election, but, instead of the expected early Green Paper, which the hon. Member for Rotherham is so keen on, a pensions review was announced in July. Instead of being actively led by the Minister for Welfare Reform, it was run by the Under-Secretary of State for Social Security, the hon. Member for Southampton, Itchen (Mr. Denham). It took him until September to announce the members of the review panel and on 31 October the review was closed, only to be reopened until May 1998. We still have no sense of what basic policy the Government will pursue.
Even the review is confused. After 1,800 responses, the Under-Secretary announced on 3 November in a written answer:
The Government intends to publish its initial framework for change in the first part of 1998. There will then be a further period of consultation before firm proposals are developed."—[Official Report, 3 November 1997; Vol. 300, c. 90.]
On 19 November, the Under-Secretary opened another, separate review, before he had read and digested all the responses from what he called the stakeholder

consultation. What was the purpose of the first review? I was not aware that it left out stakeholder provision; indeed, various people commented on that subject in their submissions. The Government seem to be making policy by procrastination.
It is worth reminding ourselves what the Minister for Welfare Reform said just before the election. Speaking about his party leader—now the Prime Minister—on 18 October 1996, the right hon. Gentleman said:
His aim is for Labour to enter Government with a sufficiently well created plan that it can be part of the first Queen's speech and a draft Bill in the first year, allowing for a year for debate.
He went further, saying that it was
crucial to avoid the mistakes of Dick Crossman and Harold Wilson who spent four years consulting and lost their plan in the 1970 election".
I heard the right hon. Gentleman say earlier from a sedentary position, "It will be." We are already reaching the end of the year and no Green Paper is even evident. As he knows, the review process is stretching out to the latter part of next year. He says that there will be something, but we see nothing coming up.

Mr. Phil Hope: The hon. Gentleman talks about the pensions review, but does he not agree that, in cutting value added tax on fuel, eliminating the gas levy and announcing increases for winter fuel of £20 to all pensioner households and £50 for those on income support, we have done more for pensioners in the past six months than the Conservatives did in 18 years?

Mr. Duncan Smith: The hon. Gentleman is doing very well, is he not? He rose to take a position on pensions, but he talked about a giveaway in the green Budget, which was more about protecting the position of those on the Government Front Bench than anything else. It was cobbled together quickly to get them out of a hole because they are getting nowhere over all their so-called reform processes.
The hon. Gentleman should try answering the question: when will they go for the Prime Minister's position of full pension and welfare reform? There has not been a word so far about where all that is. Perhaps the hon. Gentleman would like to answer that question. When will that be? There is no answer, is there? So it goes on. I can understand the frustration of the Minister for Welfare Reform as he perceives the process being delayed; after all, he has written about it. As I said, he wrote all that on pensions alone.
The delay goes back to the emergency Budget that the Chancellor produced for, it now appears, no reason at all. He went further than he said and not merely on the windfall tax. He set about pensions. Let us put on one side for a moment the Chancellor's attack on pensions, which will cost those who need to invest in their pensions billions of pounds and lose them a lot of money.
With the abolition of advance corporation tax dividend tax credit, the right hon. Gentleman devalued the national insurance rebate. Having made those changes, far from leaving the state earnings-related pension scheme as an option for those who wished to remain in it, as the Labour


manifesto said—a rather vague commitment—he has gone a stage further and has enhanced the option of SERPS, increasing the number of people opting in. That is happening now and research by Scottish Life clearly shows that,
Based on somebody earning £15,000 a year, remaining out of SERPS could cost them the equivalent of £360 a year in retirement income. And for higher earners it could be far more.
So people are opting back in. On the margins, there is no purpose in staying out as the rebate has been so devalued.
The Minister for Welfare Reform is also fairly unequivocal about SERPS, as the Secretary of State knows. The Minister said:
A failure to close SERPS will mean substantial tax bills for future generations.
I agree, as I am sure does the Secretary of State. I am also intrigued by how the Minister views his colleagues, given that he said at some point:
Anyone persuaded SERPS had a future ought to be made a ward of court".
On 29 October, given all the confusion, the Prime Minister had clearly lost track of who was running what. My right hon. Friend the Member for South-West Surrey (Mrs. Bottomley) asked straightforwardly at Prime Minister's Question Time whether the Minister for Welfare Reform had his support for thinking the unthinkable and proposing pension improvements. The Prime Minister expressed himself in complete confidence with the Minister for Welfare Reform's duties—an interesting choice of words—but went on to say that the Minister would be producing a Green Paper shortly. We are talking about pensions, let us remember. Are we to assume that the Minister will also be carrying out a separate review of pensions? Perhaps he could let me know.

The Minister for Welfare Reform (Mr. Frank Field): indicated assent.

Mr. Duncan Smith: I see that the right hon. Gentleman is nodding, so we have established that. In that case, what was the purpose of the review by the Under-Secretary of State, and if the Prime Minister thought in October that the Green Paper would be issued shortly, why do we have to wait until the new year to receive it? Nothing has happened. Three months after that promise, we will still be waiting.
The Secretary of State, who may or may not be listening, has said remarkably little about pensions in the past few months, either in the House or outside. Pensions reform is being pushed into the blue yonder. It is too difficult to rectify, and there are too many hard choices to make, so the Government prefer to slide it out into the future and leave only the minimum change that can be made. So it goes on.

Caroline Flint: How many people suffered the abuse of pensions mis-selling under the previous Government? The hon. Gentleman is outlining duties; what duty and responsibility did the Tory Government have to prevent that?

Mr. Duncan Smith: The hon. Lady asks a serious question. The issue of pensions mis-selling is being dealt

with, and was being dealt with before the general election. I understand from the Treasury figures that the sum under investigation is £2 billion maximum, and perhaps less.
That is a serious matter, but why do Labour Members never mention the fact that, as a result of all the changes that the Conservative party made before the general election, about £750 billion—more than in the whole of the rest of Europe put together—is now invested in private pensions here? They never mention that success. How do they intend to persuade members of the public to invest in pensions if they never talk about the success of private pensions, which were driven forward by the Conservative party over the years against perpetual opposition from Labour?
The process with welfare reform appears to be similar. We have a series of proposals that need to be implemented quickly, so that the changes can be bedded down and we can have proper discussion to make sure that there are no problems. All through the summer, no one would answer the important questions: when and whether there would be a Green Paper on welfare reform, and who would produce it.
Throughout the summer, a series of leaks and counter-briefings in the press took the debate beyond the House, but still we have no answers. The Financial Times reported that someone in the Treasury, who is apparently close to the Minister for Welfare Reform, said:
His package now seems insufficiently new Labour.
The summer was dominated by a war of words, with briefing and counter-briefing between the Secretary of State and the Minister for Welfare Reform. There was no progress until finally, at the end of the summer, she was forced to agree to his producing a Green Paper; but not, apparently, until early in the new year.
Is the Chancellor's welfare review—it is run by Martin Taylor and has nothing to do with the Department of Social Security—which is supposed to be considering merging tax and benefits, taking priority? Does the Chancellor not like what the Minister for Welfare Reform has written progressively over the years? In his green Budget, the Chancellor continued to refer to the Minister's proposals, even though it appears that they are being rapidly watered down and now focus solely on making family credit payable through pay-as-you-earn rather than through the benefits system.
The clash between the Minister for Welfare Reform's views on the ending of means testing and the Chancellor's view that means testing is necessary through the tax system may explain some of the problems.
There is also the thorny point of what the Secretary of State thinks of the Chancellor's proposals. After all, she has long said that she does not like the idea of benefits being paid through the wallet rather than through the purse. There was a big debate, and she always argued that benefits should be paid to the person at home. Then again, if the Chancellor requires the change she will no doubt change her mind and implement it. That seems to be the process, and it is what we have come to expect.

Mrs. Helen Brinton: I remind the hon. Gentleman of his celebrated comments in a pamphlet in 1993, when he suggested that disability living allowance should be means-tested. Does he write in one tone and talk in another?

Mr. Duncan Smith: If the hon. Lady were to check the intervention list from her Whips Office, she might


understand that she has got most of that wrong. I will discuss the disability living allowance later, but the simple fact is that no welfare reform package or review is on offer. The hon. Lady cannot substitute that fact with an attempt by her Whips Office to find out exactly what someone else, who is not even in government, proposed. The Labour party are in government; the hon. Lady is in government; when are we going to get some proposals from them? We have heard no answers from them. The hon. Lady should check her Whips Office little list again, because it has got it quite wrong.
I posed a series of questions of the Secretary of State when she first announced in the Budget debate how she intended to operate some of her proposals, such as the new deal for lone parents. The right hon. Lady stuck with single-minded determination to that new deal; that is what she has spoken most about and has issued most press releases about. It seems to be the main drive behind most of what she has said and done.
Assuming that the pilot programmes were meant to inform us whether the policy on the new deal for lone parents is working, I said from the beginning that the right hon. Lady would need to institute proper control groups inside the pilot programmes to measure the effectiveness of each pilot. Most of those comments were obviously ignored.
As I and my team went around the pilot centres during the summer, it became absolutely clear that, with the absence of control groups, it would be impossible to measure why people got jobs and whether that was because of the new deal. We are now told that some time in September the Department of Social Security partially changed its mind about control groups. It did so retrospectively—that was never mentioned in the original plan, and the right hon. Lady never answered that question. The Department now needs to tell us how those control groups will work. I gather that it is even trying to backdate the information from those so-called pilot areas.
When the control groups were set up, there was a flurry of press releases—long before any real success or failure could possibly be measured. Of particular interest was the Secretary of State's press release of 23 September, just two months after the programme began, which spoke glowingly about how successful it was. The other important press release was that issued on 23 October, when the Secretary of State readvertised her programme as a huge success, after just three months.
The time came to analyse those figures, and we found that when the Secretary of State announced that they were a huge success she was talking about a 20 per cent. success rate. She failed to tell us that 433 people taking jobs out of the 8,600 to whom letters were sent is equivalent to a 5 per cent. response rate. She has never yet once explained how she can make a success out of 5 per cent., when so many people have not even bothered to respond to those letters.
What has happened to all those people who did not respond? Have the Government studied the reasons for that lack of response? Not one comment have we heard from the Government. Now we discover from figures apparently released by the right hon. Lady's Department

that the chances of people getting work from the programme are roughly the same as they would be were they not in that programme.

Ms Margaret Hodge: The hon. Gentleman has been speaking for 20 minutes and, apart from attacking the fact that the Government are reviewing the welfare system, he has said absolutely nothing about the Opposition's views on welfare reform. At the very least, will he say whether he supports the Government's proposal on the new deal for lone parents?

Mr. Duncan Smith: Frankly, if the hon. Lady tries to persuade her right hon. Friend the Prime Minister to make us all offers to move over to the Government Benches, we will listen. The truth is that, believe it or not, the hon. Lady is in government. Those on her Front Bench are there to make decisions. When will they do so? The Government do not like the fact that I am simply saying that when they promise major reforms, and then do absolutely nothing, they are misleading the public. The longer we go on about that, the less they like it. We have been offered no reform.

Mrs. Teresa Gorman: Could it not be that, while the Minister for Welfare Reform said:
Women with children of school age should be under an obligation to look for work",
the Secretary of State cannot make up her mind? In October, she said on television:
Compulsion is absolutely not the issue.
While they are busily arguing among themselves, they cannot come up with a consistent policy.

Mr. Duncan Smith: That is the point that I am coming to. The reality is that there is one dispute after another. The Secretary of State is arguing with the Minister for Welfare Reform about who should be in charge. He wants compulsion; she does not. I agree with my hon. Friend the Member for Billericay (Mrs. Gorman) that it is one endless internal dispute after another, which is why we are not getting anywhere with the reforms. There have been no reforms at all.
The new deal for lone parents is becoming more and more of a trumpeting exercise in publicity rather than a serious study about how people can get into work and how they can be assisted in doing so if they wish.
The Conservative Government proposed some changes to cut child benefit and the supplement to income support in their final Budget last November. The present Secretary of State attacked the proposals and immediately said that she did not intend to implement them once in government. She went further in an interview with Polly Toynbee of The Independent. When asked whether she would introduce the changes to lone parent benefit, she said, "No, of course not." On 28 November 1996, she said:
The Secretary of State says that he is cutting benefits to lone mothers because they are at an advantage compared to married mothers…but it is not fair on the families of women who bring up children on their own. They will be worse off."—[Official Report, 28 November 1996; Vol. 286, c. 501.]

Mr. Steve Webb: Will the hon. Gentleman confirm that on the two occasions in this


Session when there have been votes on the abolition of benefits for lone parents, the Conservative party has abstained, thus proving that it has no opinion?

Mr. Duncan Smith: The hon. Gentleman asked what our position is. Had we won the last election and been in government now, we would, without question, have implemented the changes. I have told the Government that.
I can tell the Liberal Democrats that the simple position is that we certainly shall not oppose any such changes if the Government introduce them. That is straightforward and our position is clear. We have not broken a pledge, unlike the Labour party—the party of the hon. Member for Rotherham. [Interruption.] The hon. Gentleman should calm down—he is obviously being vibrated too much by his Whips Office. He and his hon. Friends have broken a pledge—the Secretary of State has broken it more than anyone else.
In the interests of clarity—[Interruption.] It is no good trying to protect the Secretary of State; I just want to hear from her about it. In 1996 and 1997, she made it absolutely clear that she would not implement the change. Will she tell us exactly what changed her opinion? If she disagrees with the policy in principle—as it seems from those quotes and from all the speeches that she has made and discussions that she has had—will she now give an undertaking that if, at any time, the Exchequer moves into the black and starts to repay debt, she will reverse the cuts? She might do so if she does not agree with the policy in principle and it is only about saving money. At some point in the future, will she change her opinion, or will she stand by the reductions in lone parent benefit that we proposed before the election and she attacked? Would she like to answer that question? No, she does not want to answer.
The Secretary of State's view that the Labour party in government would not implement the cuts was supported by the Prime Minister—her Back-Bench colleagues should remember that. When he was asked on "World at One" whether he would implement the cuts, he said:
No. We believe that we can avoid that situation within the existing budget".
He knew what he was saying; he was referring to what the Secretary of State had said to Polly Toynbee in an article in The Independent. He was clear and unequivocal. He knew exactly what the Labour party was planning to do in government: stick to existing spending totals.
It is no good Labour Members saying that, before the election, the Conservatives instigated a devious plot to change the spending totals; they knew what they were, and the present Secretary of State and the Prime Minister knew that.

Mrs. Anne Campbell: Will the hon. Gentleman give way?

Mr. Duncan Smith: I shall give way later.
Our position has been clear. Had we been in power after the election we would have stuck to our pledge and implemented the policy, because we believed that it was the right thing to do.
The most important result of the right hon. Lady's problems with her Back Benchers and her Department was that, at the last moment, the Chancellor decided to

cobble together a rescue package in the green Budget and buy off the animosity against those changes with the announcement about after-school clubs. What gave the game away was that, in answer to a written question about the policy on after-school clubs, the Under-Secretary of State for Education and Employment, the hon. Member for Newport, East (Mr. Howarth), had written:
We are currently developing a National Childcare Strategy which will help parents…I will make an announcement in the first part of next year."—[Official Report, 24 November 1997; Vol. 301, c. 361.]
That is true, is it not? He wrote that at the same time as the Chancellor was rising to his feet to announce that there were to be after-school clubs.

The Parliamentary Under-Secretary of State for Education and Employment (Mr. Alan Howarth): indicated dissent.

Mr. Duncan Smith: The Minister was absolutely clear that they were going to give the details of the package next year. They changed their plans simply because the right hon. Lady was in trouble, along with her right hon. and hon. Friends.

Mr. Mike Hall: rose—

Mr. Duncan Smith: There is no point in rising to protect them—the hon. Gentleman should stop trying to be an air raid shelter taking some of the flak for the Secretary of State. The reality is that the Chancellor suddenly managed to find £200 million from the lottery, £50 million from the Department for Education and Employment and £30 million from the windfall tax to pay for after-school clubs.
The announcement that 50,000 people were to be trained to be child carers was given as though it was something new, but it had already been mentioned in the Budget. During the Budget debate, I told the Secretary of State that it would be difficult to find 50,000 child carers from the welfare-to-work programme, given that numbers were falling fast because so many jobs were being found. In an attempt to find those extra 50,000 people, the Government have again decided to backtrack by opening up training to all young unemployed, whether or not they have been unemployed for more than six months.
There is a problem with that—[H0N. MEMBERS: "Yes, there is."] I am glad Labour Members admit that there is a problem. The interesting thing is that Labour Back Benchers do not seem to understand that the age limit has been set below 26 because of the minimum wage. It appears now that the Government will exempt all those under 26 from the minimum wage, so that they will not have to pay the extra sums that they know they cannot afford.
The Secretary of State and her right hon. and hon. Friends have worked it out very carefully. Will the right hon. Lady let us know whether they will train people over 26 if they cannot find enough people to train as child carers, regardless of whether the exemption on the minimum wage stands for those under 26? Will she tell us that, either in her speech or in an intervention now?
All right, fine. We will not get an answer on that.

Mr. MacShane: Get on with it.

Mr. Duncan Smith: It is no good the hon. Gentleman shouting—getting on with it is the simple process of


discovering from the Secretary of State exactly what her plans are. Not surprisingly, we will now move on to disabilities.

Mr. David Rendel: I am grateful to the hon. Gentleman for giving way before leaving the subject. Is the problem not merely the number of people the Government have to find to take on child care, but the serious nature of the business of child care, which is not a matter for any frivolity? Carers must be of high quality and properly trained, and that will take a long time.

Mr. Duncan Smith: I agree with the hon. Gentleman. Interestingly, we will have people trained for child care through the welfare-to-work programme who might have to be compelled into that process, but they might be looking after the children of those whom the right hon. Lady refuses to compel to go into work. That is a dichotomy: on the one hand, we will have people not compelled to take up jobs and, on the other hand, people being compelled to train to look after the first group's children. Child care is a serious subject and the Government are treating it with a great deal of frivolity.
I have some serious questions to ask the right hon. Lady about disability benefits; I want to give her the opportunity to clarify one or two problems.
First, there are some people with disabilities who have been awarded disability living allowance for life. Will the Secretary of State guarantee that life means life, and that she intends no change?
Secondly, we hear that the Government are considering taxing disability living allowance. The Labour manifesto stated that there would be no new taxes; given the raid on pensions, who would now believe that? Where do these pledges leave people on disability living allowance? Do the Government plan to single them out, or does the right hon. Lady deny that such a proposal exists?
On 17 November, the right hon. Lady answered a question at the Dispatch Box, saying that she and her colleagues had spoken to more than 40 organisations representing people with disabilities; yet on the "Link" programme on ITV yesterday, disability groups were adamant that they had not been approached, and they accused the Secretary of State of misleading the House of Commons. The programme had contacted 28 leading organisations, including the Royal National Institute for the Blind, all of which said that they had not been consulted or approached by the Secretary of State or the Department. Will the right hon. Lady take this chance to clear that up? Did she intentionally or otherwise mislead us during oral answers to questions or does she stand by her claim that she contacted these organisations?
Benefits Agency staff have been making home visits to 150,000 people who receive disability living allowance at the higher rate in both care and mobility components. What training have those people had? These are all serious questions to which we demand serious answers, either from the right hon. Lady or at the end of the debate.

Mr. Mike Hall: rose—

Mr. Duncan Smith: I am concluding.
The debate would not have been necessary if the right hon. Lady and her team had set about their brief in line with what the Prime Minister has said. In a rhetorical flourish, he told them to think the unthinkable; they would change welfare and engage in sweeping pension reform. The right hon. Lady and her team have not done that. They promised before the election not to cut lone parent benefit and the supplement on income support, yet they are doing just that.
In everything that is going on we perceive delay, vacillation and policy U-turns. The cross-briefings and disputes between the people running the Department do not bode well for the biggest Department in government or for the Secretary of State's stewardship of it. Labour party members charged around when they were in opposition—many of them still think they are in opposition—promising Back Benchers and pressure groups to deliver on their most favoured programmes; a nod here and a wink there. It was not so much a case of a wet Wednesday in Dudley as of a United Kingdom programme of empty promises seven days a week.
The Treasury seems determined to make spending cuts, while departmental Ministers are more worried about their jobs than anything else. They are so busy trying to extricate the knives from each other's backs that they have no time to think about where the next cut will fall.
No wonder Labour Back Benchers have smelt a rat. Someone needs to take control of the Department before it descends into chaos. I urge the right hon. Lady to get a grip and to get these reviews moving, as she promised to do. She must also explain why she has reneged on her promise before the election not to cut benefits. She must get the Department focused.
The Secretary of State says that no Green Paper is ready yet. The Minister for Welfare Reform has already published quite enough to form the basis of a Green Paper, but the right hon. Lady simply has not bothered. Instead, her Department is led by press release, cross-briefing and dispute. It is time she started to change—fast.

The Secretary of State for Social Security and Minister for Women (Ms Harriet Harman): I beg to move, To leave out from "House" to the end of the Question, and to add instead thereof:
congratulates the Government for the progress that has already been made on reforming the welfare state to tackle social exclusion and welfare dependency; backs the Government's strategy of offering hope, opportunity and a better standard of living for people through its welfare to work programmes for lone parents, disabled people and those with long-standing illness, young unemployed people and the long-term unemployed, and the National Childcare Strategy, in contrast to the previous Government's approach of writing millions of people off to a life dependent on benefit; welcomes the Government's determination to ensure security in retirement for today's and tomorrow's pensioners through the pensions review and the action the Government has already taken to get help to Britain's pensioners, particularly the poorest pensioners, by cutting VAT on fuel and through the £20 winter fuel payment to pensioner households and the £50 winter fuel payment to pensioner households on Income Support; and congratulates the Government for keeping its promises and delivering its manifesto commitments to the British people.".
This debate has shown that the Tory Opposition have nothing to say about welfare reform, nothing to say about tackling worklessness and poverty, and nothing to say


about social exclusion or the problems of pensioners. However, the debate does allow Labour Members the opportunity to expose the full extent of the previous Government's legacy of failure, to set out the Government's approach to tackling that failure and to talk about the progress that we have already made.
Reforming the welfare state to tackle poverty and welfare dependency is a priority of the Government. We are delivering on that commitment. There is a new deal for the young and long-term unemployed, and the biggest employment programme for 40 years. A new deal for lone parents is already up and running and transforming the lives of lone parents and their children. There is the first national child care strategy for Britain, with the biggest ever investment in out-of-school child care. There is a new programme to give extra help and opportunities to people who were written off by the previous Government as long-term sick and disabled. We are getting help to all Britain's pensioners, with extra help to the poorest. That is what we said before the election that we would do, and that is what we are doing, now that we are in government.
Before I continue, I want to place the debate in context. The social security system that we inherited failed to tackle poverty. It trapped people on benefit and did nothing to help them into work. Under the previous Government, spending on social security rose to £100 billion a year—£25 billion more than the total amount of income tax collected in any one year.
Despite that huge growth in welfare spending, during 18 years of Tory rule, more and more people were excluded from the main stream of society. The system was not working because it had failed to respond to social and economic change. The Tories got it wrong. Growing social exclusion—for the benefit of the hon. Member for Chingford and Woodford Green (Mr. Duncan Smith), who does not seem to know what it means—means adults deprived of work, children deprived of a decent education, whole communities cut off from their more prosperous neighbours, and a growing gap between rich and poor.

Mr. Simon Burns: The Secretary of State said that the Tories got it wrong. If that is correct, why has she now decided to implement one of the policies which, according to her, the Tories got wrong—the cuts in lone-parent benefit, which the right hon. Lady constantly condemned at the time and said that she would not implement? Will she once and for all tell the House what has gone through her mind to make her change her policy, announced last winter, that she would not implement those cuts?

Ms Harman: The Tories got it wrong on lone mothers, because their proposals left 1 million lone mothers bringing up 2 million children on income support, and offered no help or opportunities for them to work, despite a growing economy.

Mr. Burns: I am grateful to the right hon. Lady for giving way again. Now will she answer the question? Why is she now implementing the cuts that we proposed, which she condemned as wrong?

Ms Harman: I have answered the question. We said time and again that our approach to lone mothers would be to help them to work, so that they could be better off than they would ever be on benefit.
In a growing economy, increasing numbers of people were left behind. There are now 3.5 million households of working age in which no one works. A quarter of all children are growing up in families in which no one works, and the poorest pensioners are being left behind. Although one in eight pensioners are among the richest 20 per cent. of people in the country, a quarter are entitled to income support.

Mr. Burns: Answer the question now.

Ms Harman: I have answered the hon. Gentleman's question. We said that we would have a welfare-to-work approach to tackle the poverty of lone parents and their social exclusion and that of their children. The previous Government proposed no opportunities programmes for lone mothers.

Several hon. Members: rose—

Ms Harman: I will not give way to the hon. Member for West Chelmsford (Mr. Burns); I have given way to him twice to answer the same question. I give way to his hon. Friend the Member for Maidenhead (Mrs. May).

Mrs. Theresa May: Did the right hon. Lady have the opportunity this morning, as I did, to listen to the radio phone-in programme on welfare benefits? A single mother rang to say that, although the Government claim to be doing so much to get lone parents into work, if she were to take temporary work over the Christmas period to earn money to provide for her children, she would go back on to lone-parent benefit at the reduced rate. How would the right hon. Lady answer that lone parent?

Ms Harman: We do not believe that the changes will be a disincentive to work for lone parents; if we did, we would not be introducing them. Our approach to lone parents is to help them to become better off, by working, than they could ever be on benefits.

Mrs. Gorman: If what the right hon. Lady is saying is correct, why have more than 100 Labour Back Benchers signed an early-day motion and written letters privately condemning her policies?

Ms Harman: The hon. Lady speaking out on behalf of Labour Back Benchers is a touching spectacle, but they are probably more than capable of speaking out for themselves.
The British people have had enough of division. The general election showed that they were no longer prepared to put up with such a deeply divided society. They gave us a clear mandate to tackle social exclusion and to build a better one-nation society.

Mr. John Smith: Is my right hon. Friend aware that, according to the latest published figures, in parts of my constituency the average gross household income, including all non-housing benefits, is—and I ask hon. Members to listen carefully—less than £3,000 a year? That is less than 60 quid a week to support


a household. Those people have been excluded and they are looking forward to my right hon. Friend and the new Labour Government giving them hope.

Ms Harman: That is why the people in my hon. Friend's constituency will welcome our proposals for a minimum wage and a working families tax credit to make work pay.
The British people gave us a mandate not just to tackle social exclusion, but on how to tackle it—not simply by adding to the benefits bill, which had been tried and had not worked, but by investing wisely in extending economic opportunity to all.
We have two equal but quite distinct duties in government—a duty to invest in helping those who can work to do so, and a duty to focus help properly on those who cannot work. The key failure of social policy in recent years has been the failure to differentiate between those two groups. That has resulted in hundreds of thousands of people of working age being written off to a life of dependence on benefit, when the Government should have been helping them to work. Work is central to this Government's attack on social exclusion.

Mr Rendel: The right hon. Lady said that she was hoping to focus benefits on those who were not able to get work. In what sense is the cut in lone-parent benefit focusing benefits on lone parents who cannot get work?

Ms Harman: No lone parent currently in receipt of income support will have their benefit affected. However, there will be a welfare-to-work programme—and I know that the hon. Gentleman agrees with us on this—because the best way to tackle poverty among lone parents and their families is to ensure that they are much better off in work than they could ever be on benefit.

Mr. Dale Campbell-Savours: My right hon. Friend will be aware that the housing benefit system works in such a way as to lock people into unemployment. Why do we not take a far more imaginative approach and directly interfere in the free market for rents, thereby reducing housing benefit and saving hundreds of millions of pounds—far more than anything we could gain by the measures that she is considering?

Ms Harman: My hon. Friend is absolutely right: the housing benefit system locks people into dependence on benefit and deters people from working. I and Ministers in the Department of the Environment, Transport and the Regions have said that, in reviewing the social security system, we shall examine the role of housing benefit to ensure that the housing support system accords with our priorities: that people have every incentive to work and do not remain—as they were under the Tories for 18 years—trapped on benefit when they want to work and be independent.

Mr Campbell-Savours: My right hon. Friend has missed my point. High rents mean high housing benefit and they exist in a free market for rents, which affects millions of people. Why do we not interfere there, thereby slashing the benefit bill in a major way, instead of concentrating our efforts on lone parents?

Ms Harman: My hon. Friend raises some interesting points, which we shall make part of our housing benefit

review. We shall go out of our way to discuss with him his constructive proposals, so that they can feed into our thorough and comprehensive review.
Work is central to the Government's attack on social exclusion. Work is the way in which people provide for themselves and their children. It is how people set an example to their children.

Mrs. Anne Campbell: Does my right hon. Friend agree that, when the Conservatives were in government, all they did was to chastise and castigate lone parents? This Government are presenting them with real opportunities. Will she join me in congratulating the Cambridge benefits agency on being close to getting its 100th lone parent back into work?

Ms Harman: I congratulate not only the Cambridge benefits agency, but my hon. Friend, who had a role in pioneering the ideas behind this programme of bringing together all the advice and information about jobs, training and child care, to enable lone parents to move off benefit and into work, where they can be better off.

Mr. Julian Brazier: rose—

Mr. Dennis Skinner: rose—

Ms Harman: I give way to my hon. Friend the Member for Bolsover (Mr. Skinner).

Mr. Skinner: Is my right hon. Friend aware that, in a perfect world, the idea of getting everyone a job is sound? However, it is an imperfect world and it will always remain so, whether the Conservative or Labour party is in power. Welfare to work is a wonderful-sounding notion, yet in large parts of Britain, including my constituency, many people would like to get into work but cannot, and that will apply to lone parents as well.
Another question has to be taken into account. Some lone parents want not to work, but to look after their children, and they should not be penalised because they take that honourable stance. The question is: where is all the work in this imperfect world, and why should people be penalised because they want to bring up their kids?

Ms Harman: My hon. Friend makes a point about people in his constituency without work. The economy may be growing, but some people in my constituency and in his constituency are simply left behind. In my constituency, some young people do not have the proper skills and educational qualifications to allow them to apply for the jobs that are available. Some lone mothers do not have child care or help to enable them to take the jobs that are available, and there are people who have been made redundant in their late 40s and who think that no employer will ever look at them again because they have been written off.
Our welfare-to-work programmes not only sound nice, but will transform the lives of people who were written off under the Conservative Government; for those people, the programmes will bring the dignity of work. Work is essential, helping people to provide for their children during their working years and to provide for themselves in retirement. Work by those who can helps to support those who cannot. Work is not just about earning a living. It is central to independence and self-respect.
We all have constituency experience of families with a spring in their step who have hope and the prospect of a better future, and of others with no hope and no prospects who are downcast. That is the difference between a family with work and a family without work. Work makes the difference between a decent standard of living and never-ending benefit dependency; the difference between a cohesive society and a divided one. That is why we are reforming the welfare state around the work ethic.
We have put into place the biggest welfare programme ever in this country, tearing down the barriers to work, enabling people to realise their potential and thereby increasing the prosperity of society. We are investing more than £3 billion in a new deal for the young and the long-term unemployed.
Too many of our young people have never had a job. They feel that they have been thrown on the scrap heap before they have begun. That was acceptable to the previous Government, but it is not acceptable to us. From April, every young person unemployed for more than six months will be given real opportunities, with worthwhile jobs and quality training.
Too many people who lose their job and cannot find another feel that they will never work again. That was acceptable to the previous Government, but it is not acceptable to us. From next June, employers will be encouraged with a payment of £75 a week to take on someone who has been unemployed for more than two years.
Our welfare-to-work programme recognises that the problem of worklessness that grew under the previous Government goes far beyond the official unemployment statistics. Too many lone mothers have been written off to a life of dependence on income support. We now have 1 million lone mothers bringing up 2 million children on benefit as a result of the previous Government's policies.

Mr. Brazier: Will the right hon. Lady give way?

Ms Harman: I have given way about 15 times. I intend to press on with my speech. The hon. Gentleman should try again later, when I have made some progress. He might need the time to think up a sensible question.
Lone mothers want to work for the same reasons as married women—for a better standard of living for their children. Lone mothers have even more reason to want to work—not just for the money, but to set an example to their children that life is about work, not just about being on benefit. Lone mothers who most need and want to work are less likely than married mothers to be working, because they are trapped on benefit. Our new' deal for lone parents is a radical programme that recognises and backs lone mothers' desire to work. It is already up and running in eight areas. It is based on the simple idea of giving lone parents whatever help they need to get into work. That help is offered when their youngest child starts school at five.
What a contrast with the previous Government, who told lone parents to stay on benefit until their youngest child was 16. The previous Government then complained about the inevitable rise in the benefit bill and said that lone mothers posed a threat to society.
Last week, we announced that the national roll-out of the new deal for lone parents would be brought forward to April 1998 for all lone parents making a new claim for

income support. In the eight pilot new deal areas, lone mothers with children under five have been asking for help from the programme, too. That is not surprising, when half the married women with children under five are working. That is why we have allocated an extra £25 million to our new deal—specifically for lone parents whose youngest child is under five—when it rolls out nationally next year.
The new deal has been welcomed by lone mothers, and employers have been offering them jobs. The hon. Member for Chingford and Woodford Green can be dismissive about it, but it has transformed the lives of the lone parents whom it has already helped into work. One lone mother with four children, in Cardiff, who started work as a care assistant in September, wrote to us, saying:
It feels good to be back at work. I haven't had a proper job for 14 years and I wouldn't have had the confidence to go out and look if it wasn't for the New Deal.
Of course, we are evaluating the programme. That was decided at the outset. We are spending the best part of £1 million on an evaluation between the eight pilot areas and six matching control areas, so the hon. Gentleman's point about a lack of evaluation is complete nonsense—like, unfortunately, so many of his other points. Does he welcome the help that we are giving to lone mothers, such as the one in Cardiff whom I mentioned? I shall give him the opportunity specifically to put it on the record. Does he back our new deal for work for lone parents?

Mr. Duncan Smith: Of course I back the efforts to help lone parents. The Secretary of State may recall that, when she came into government, there was already a programme to be set up in the same eight areas, called parent plus, which was started by the Conservative Government.

Ms Harman: rose—

Mr. Duncan Smith: No. The right hon. Lady asked me a question. She shall get the answer.
The right hon. Lady has grafted her policy on to ours, but she lost one essential part. She dropped the control groups that were part of the pilot areas, because she was interested solely in the publicity and in trumpeting success. She does not know why many lone parents get jobs, because she does not study the results.

Ms Harman: After 18 years of Conservative government, there was no programme for opportunities for lone mothers, only a programme of criticising them from the conference platform in Brighton and Blackpool. The hon. Gentleman is not able to listen to what I am telling him about the evaluation. We are having an evaluation, where we compare the eight pilot areas with six matching control areas.
Of course, one of the biggest headaches for mothers who want to work is child care. We are taking action on that, too. We are implementing a three-part national child care strategy to meet parents' demands, which for so long have not been met: for accessible, affordable, high-quality child care.

Mr. Duncan Smith: The right hon. Lady is talking about measuring the results. We visited the pilot areas in September. When officials were asked whether there were


control groups to measure the results, they knew absolutely nothing about it. They said that the control groups did not exist. Her Department cobbled them together in late September. That is the reality, because they were not there before. The right hon. Lady is misleading everybody.

Ms Harman: I am not misleading the House. The hon. Gentleman is having difficulty understanding this. The local officials were collecting the information. There is an academic programme of evaluation. That is how it is done.

Mr. Duncan Smith: It has been backdated.

Ms Harman: It has not. It was implemented at the outset.
As I said, we are implementing a three-part national child care strategy to meet parents' demands for accessible, affordable and high-quality child care.
First is accessibility. In his statement to the House last Tuesday, my right hon. Friend the Chancellor of the Exchequer announced £300 million to extend out-of-school child care. That is another manifesto promise delivered. We shall extend out-of-school child care to every community in Britain. There will be an extra 30,000 out-of-school child care projects—up from only 3,500 at present. It will mean places for nearly a million children, so that child care will be available after school—possibly before school—and certainly in the school holidays and during in-service training days. We are making swift progress on our plans.
No blueprint will be imposed by Whitehall. We shall build on what works best at local level, using the expertise and experience of the public, private and voluntary sectors.
I wish to announce to the House that next month my right hon. Friend the Secretary of State for Education and Employment and I will be bringing together the key child care players in a joint conference to drive forward our work on the national child care strategy, which will build up to a further announcement in January. The conference will be chaired by the Under-Secretary of State for Education and Employment, my hon. Friend the Member for Newport, East (Mr. Howarth) and by the Under-Secretary of State for Social Security with responsibilities for women, my hon. Friend the Member for Lewisham, Deptford (Ms Ruddock).
The hon. Member for Chingford and Woodford Green implies that our massive investment in child care was dreamed up over a weekend. I invite the hon. Gentleman to read the Labour party's manifesto, in which we stated that we would have a national child care strategy starting with a network of out-of-school clubs partially funded by the lottery. There is nothing mysterious or even spontaneous about our approach. Our policy is what parents want, and it is what we are delivering.

Several hon. Members: rose—

Ms Harman: No, I shall not give way.
Secondly, there is affordability. We have already announced extra help for parents with the costs of child care through the £100 child care disregard in family

credit. There will be more help with the cost of child care through the working families tax credit, which my right hon. Friend the Chancellor of the Exchequer set out in his pre-Budget statement last week.
Thirdly, I move on to quality. We have always argued that the issue is not only about more places but about quality, and that means high-quality child care. We must ensure that there is the proper quality of child care.

Mrs. Gorman: Will the Secretary of State give way?

Ms Harman: I shall not give way to the hon. Lady, because it is clear that she is trying to speak up for the Government rather than the Opposition. I shall not give way to her while she seeks to play that role. Of course, the hon. Lady was never much in support of the Conservative party when it was in government. Perhaps she is following a familiar line.
As part of ensuring that properly qualified staff are available as child care expands, we are investing £100 million to train 50,000 young people as nursery and play staff through our welfare-to-work programme, leading to qualifications as a play worker for the over-fives, or as a child care worker for the under-fives.
Together, those measures constitute the biggest programme of investment in child care that this country has ever seen. Child care is no longer an afterthought in social policy, but it was not even that under the previous Government. The Labour Government understand that child care is central to economic policy and welfare to work.

Mr. Webb: Will the Secretary of State clarify one aspect of her approach to lone parents with young children? This is a genuine question. I am not clear about the right hon. Lady's position. Does she think that it is a valid choice for lone parents with young children to stay at home to look after their children?

Ms Harman: It is a choice that married women who are not trapped on benefit make. Half of married women with children under five work, which means that half of married women with children do not. Only a quarter of lone parents with children under five work. The difference in the participation rate in the labour market, between lone parents and their married counterparts with children of the same age, reflects the fact that the benefit system and the lack of child care preclude lone parents from making the choice. They do not have the choice of going to work. They can only stay at home and live on benefit. Our child care expansion and the welfare-to-work programme will, for the first time, give lone parents a choice. It is a choice that previously has never been open to them.

Mr. Burns: Will the Secretary of State give way?

Ms Harman: No, I shall not give way to the hon. Gentleman. The hon. Member for Northavon (Mr. Webb) asked his question in a much more intelligent way than the hon. Gentleman ever could.
It was not only lone parents whom the previous Government wrote off to a life of dependence on benefits. They also wrote off people claiming benefits for


long-term sickness and disability. Five million people identify themselves as sick or disabled, and more than 2 million of them work.
There are those whose ill health or disability means that they will never be able to work. They need and deserve proper support and a decent standard of living from the welfare state. There are others who want to work, and with the right help they could do so. However, for too long they have been written off. We shall tackle the exclusion of sick and disabled people, give them the same opportunities enjoyed by other people and empower them to play a fuller role in society.
To answer the questions of the hon. Member for Chingford and Woodford Green, of course we are working with disabled people and the organisations that represent them. We are listening to their views. Two weeks ago, we held a major seminar on welfare to work, which was attended by over 40 organisations that represent disabled people. They are playing a crucial role in shaping our approach. For the hon. Gentleman to pose as the friend of disabled people and disability organisations—

Mr. Alan Howarth: Or anyone else.

Ms Harman: Indeed, or anyone else—is breathtaking.
Disabled people are denied opportunities and they face discrimination. We shall tackle that discrimination by taking action on civil rights and by establishing a disability rights commission, about which more will be said later.
We shall help people into work. We shall develop a package of innovative measures to help people with disabilities and health problems to get work and to stay in work. We are investing £195 million from the windfall tax in our new deal for the long-term sick and disabled.
I can announce today that we shall be inviting bids later this month to spend the money from the windfall tax. We shall award some contracts on a fast-track basis in late spring and the rest by early autumn.
Extending opportunities to work is not only about ensuring that people can be financially independent during their working lives. It is also about ensuring that they have a decent standard of living when they retire. We all know that that means having a good second pension on top of the basic state pension.
The previous Government failed both today's and tomorrow's pensioners. The hon. Member for Chingford and Woodford Green made great play of our review of pensions, but we are proud of the way in which we are going about our consultation on pensions. The Conservative Government wrote "basic pension plus" on the back of an envelope only to ditch the scheme six months later. They failed both today's and tomorrow's pensioners. A quarter of today's pensioners have to rely on income support, and a further 1 million do not even claim the income support to which they are entitled. The problem is set to worsen for tomorrow's pensioners.
Two thirds of people in work now have no opportunity to save for a second pension in their retirement. They do not have an occupational pension at work and private pensions are a poor deal for them if they are on low earnings, if they work part-time or if they move from job to job.
The hon. Member for Chingford and Woodford Green cared much about the private pension industry's opportunities, but he never gave a thought to the people to whom I have referred. The Labour party's manifesto contained a promise to address the central areas of insecurity for pensioners. We said that we would give priority to the poorest pensioners, and we have already made progress. In July, I announced a fundamental and wide-ranging review of pension provision.
One of the key challenges is to provide decent pensions for all. Last week, as part of the review, we published a consultation document on the detailed framework for stakeholder pensions. We are making progress. Stakeholder pensions are designed to provide good pensions for people who do not have an occupational pension and for whom private pensions are poor value for money. They will provide a portable pension that is safe, simple and a guarantee of a good deal. At the same time, we are tackling the scandal of the people who lost out because they were mis-sold a personal pension under the previous Government's policies.
Our detailed proposals for stakeholder pensions will be published alongside our proposals for the long-term framework for the pensions review early next year. We have had 1,800 responses so far to our pensions review, and we are undertaking detailed consultation on the framework for stakeholder pensions. We want to build a consensus and to consult widely—not for us back-of an-envelope proposals for pensions. We want pension proposals that will last.

Mr. Duncan Smith: I know that many of the submissions have proposed that the state earnings-related pension scheme should be phased out or abolished. Would the right hon. Lady be happy to get rid of SERPS, regardless of what the manifesto said?

Ms Harman: There is no such thing for this Government as "regardless of what the manifesto said". We are in government to implement our manifesto. People know that our manifesto said that SERPS would remain an option for those who wanted to remain in it—

Mr. Duncan Smith: So the right hon. Lady will not abolish it?

Ms Harman: We said in our manifesto that SERPS would remain an option for those who wanted to remain in it.
We are getting help to today's pensioners now. We have already helped pensioners with their fuel bills, by cutting VAT on fuel and reducing the gas levy to zero. Last Tuesday, in his pre-Budget statement, my right hon. Friend the Chancellor announced that for this winter and next, every pensioner household would receive at least £20 to help with winter fuel bills. He announced that those on income support—almost 2 million of the poorest pensioner households—would receive an extra £50. The money will be paid in time to meet this winter's heating bills. Together with the cut in VAT on fuel and other changes, it means that the poorest pensioners will be


helped by up to £130 a year. That is making progress on our manifesto commitment to get help to the poorest pensioners, and we are doing more.

Mr. Christopher Gill: Will the right hon. Lady give way?

Ms Harman: I shall not give way to the hon. Gentleman, who seeks to intervene on the subject of pensioners, unless he explains whether he still believes that he was right to insist on voting for VAT on pensioners' gas and electricity bills. Will he include that point?

Mr. Gill: I am pleased to answer the right hon. Lady on that very point. The Labour party made much of the fact that it reduced the level of VAT on fuel. Labour Members could not have done that without the support of my hon. Friends the Members for Billericay (Mrs. Gorman) and for Aldridge-Brownhills (Mr. Shepherd). It was the votes of Conservative Members that helped Labour to reduce VAT. No credit is due to the Labour party there.
I hope that Labour will consider this question. What is the cost of the benefits that the right hon. Lady has just read out? It is a miserly £190 million out of the £5 billion that she filched from the pension funds.

Ms Harman: The hon. Gentleman talks about a "miserly" £190 million, but that is £190 million more to help with fuel bills than his Government ever gave. He voted against our reduction in VAT from 8 per cent. to 5 per cent.
We are doing more, apart from helping with fuel bills and cutting VAT. There are 1 million pensioners on an income so low that they are entitled to income support who do not claim it. My predecessor, the former Secretary of State, said that the reason why 1 million pensioners did not claim the income support to which they were entitled was that they could not be bothered and did not need the money. We do not believe that. We are determined that they should get the money to which they are entitled and we are taking action. We are setting up pilot projects to develop ways in which to get help to the poorest pensioners.
Will the hon. Member for Chingford and Woodford Green now admit that his Government were wrong to put VAT on fuel and to try to increase the rate to 17.5 per cent.? Does he back our £50 fuel payments for the poorest pensioners? Will he welcome our further measures to get help to the poorest pensioners? Pensioners want to know where he stands; in fact, he sits saying nothing.
Our extra help for the elderly shows how this Government are meeting the people's priorities. After just six months, this Government have already taken important steps to deliver our manifesto commitment to tackle poverty and inequality. We are investing in opportunities to work for people who were written off by the previous Administration. We are taking action to get help to Britain's poorest pensioners. We are preparing the way to ensure security in retirement for tomorrow's pensioners. We are rebuilding a society in which all have a stake. That was our promise to the people of Britain and that is a promise we are keeping.

Mr. Richard Spring: I am grateful to have the opportunity to speak this afternoon. I apologise for arriving late for the debate; I was detained on constituency business.
I became interested in the cause of the disabled as a result of having as my secretary in the House of Commons somebody who suffered from considerable disabilities. It was through her that I learned a great deal about the problems faced by disabled people. As a consequence, I had the opportunity to try to help people in my own constituency who suffered from disabilities. I have therefore taken a particular interest in the subject.
In the past few weeks, as a result of press comments and discussions within disability organisations, there has developed a real concern that promises 30 CD79-PAGI made to people who are disabled and others who are vulnerable are simply not being kept. I found in my post this morning a letter from a constituent. He has given me permission to read out the letter, which is a copy of his letter to the Prime Minister. He writes:
As a Labour supporter for the whole of my adult life—I am now 66 years of age—I am quite frankly disgusted by the plans to `Crack-down' upon the disabled members of our community.
I firmly believe that you have lost sight of the basic philosophy of Labour, that of caring…recent announcements of introducing taxation to Disability benefits have made me decide to write to you to protest most vehemently.
The letter-writer, referring to his wife, then says:
Now, we read that she is likely to have her pitifully small benefit taxed.
Those fears may or may not be justified, but those fears are out there because of a number of developments that have recently occurred.

Mr. Alan Howarth: Does the hon. Gentleman recall that when his Government introduced incapacity benefit in place of invalidity benefit they introduced tax on that key benefit for disabled people?

Mr. Spring: I want to touch specifically on what is in the minds of people such as my constituents. I want to deal with the way in which the Government are handling the issue in light of their promises before the election. That is the issue at stake and the Under-Secretary of State, of all people, should know perfectly well that genuine anxiety is felt by many thousands of people who, as a result of the nods and winks by Labour when in opposition, now feel that they have been let down.
There is no doubt that the future of the welfare state is a matter of immense complexity in this and other industrialised countries. As a result of demographic changes, all societies will have to address the problem. All of us who live in this era of aging population have to grapple with it.
We all accept that reform of the welfare state is necessary. Before the general election, the Labour party clearly implied that that could be an easy exercise and that the great increase in spending on the welfare state arose from the level of unemployment. We all heard that from those who are now Ministers and from the then shadow Chancellor. People clearly felt, therefore, that, if unemployment came down—this was the linchpin of the whole thing—the most vulnerable and those in receipt of benefits would receive more help. That is a travesty of the


real complexity of the welfare state. That message is one of the reasons why so many of the disability organisations and so many in our society who feel vulnerable are writing letters like the one that I have just quoted.
Unemployment has indeed fallen, more so in this country than in any other, but it has not meant that people in receipt of benefit are likely, as a result of the Government's actions, automatically to receive substantially more benefit. That was a deceit perpetrated deliberately ahead of the general election to fan people's excitement and sense of anticipation about what a Labour Government would do, but people now realise that it is not happening.

Miss Anne Begg: The hon. Gentleman talked about the fear and alarm felt by the disabled community, but it is Conservative Members who are fuelling the press reports. They do not know what is in the review—none of us on the Back Benches knows—but by emphasising cuts and taxation that may or may not be part of the review, the hon. Gentleman and his fellow Back Benchers are making the situation worse.

Mr. Spring: With respect, it is Labour Back Benchers who feel affronted and who are talking to the press and appearing on radio and television to condemn the actions of Labour Front Benchers. The idea that it is Conservative Members who have created this situation is absurd.

Mrs. Gorman: Is it not true that representatives of disability organisations appeared on radio and television at the weekend to express their concern, but that the Secretary of State had something better to do, even though she had arranged to appear? She should tell us what was so important that she could not face those people.

Mr. Spring: My hon. Friend is entirely correct. We now know that, whenever Ministers are embarrassed, as over the formula one fiasco or the issue of benefit for single mothers, they are not willing to appear on television, despite supposedly being in favour of open government. That is precisely why there is so much anxiety among Labour Back Benchers and disability organisations.
With respect, I have to tell the hon. Member for Aberdeen, South (Miss Begg) that I have spoken to many individuals who work with disability organisations, and they certainly do not share her perception of the situation.

Mr. Hope: Does the hon. Gentleman agree with the hon. Member for Chingford and Woodford Green (Mr. Duncan Smith) that the attendance allowance should be abolished, as stated in the No Turning Back group's pamphlet on benefits?

Mr. Spring: My hon. Friend the Member for Chingford and Woodford Green (Mr. Duncan Smith) rightly takes the view that there should be a considered overall reform of the welfare state, without the huffing and puffing that we had from the Labour party while it was in opposition. Before the election, the Secretary of State made the most savage attacks on the previous Government because she felt that that would ensure votes and support. In practice, people are now turning against her.
I deal now with the consultation process. I asked the Secretary of State about meetings that she and her fellow Ministers had had with organisations representing

disabled people, and she mentioned the figure of 40. However, it is not only what happens at those meetings that matters, but the nature of the consultation process itself. If the right hon. Lady is going to make substantive changes to benefits, the disability organisations are rightly demanding that they are brought fully into the loop and consulted properly. It is one thing to have superficial meetings—I am simply quoting what has been said to me—but people do not feel that, at this apparently critical stage in the Secretary of State's thinking, they are being adequately consulted.
The main problem is that the Labour party thinks that, if it disseminates a message in a certain way, the reality will slot into place. The Secretary of State make an extraordinary announcement about her new deal for lone parents. We were told that it was a considerable success and that the results were very encouraging, although 8,651 lone parents were interviewed and only 433 found work. There was no demonstrable evidence that they would not have found work anyway, but the right hon. Lady and her spin doctors put it out as a wonderful example of the welfare-to-work programme beginning to operate when in fact the success rate was only 5 per cent. If the right hon. Lady continues like this, her personal credibility and that of the Government will be undermined.

Mr. Oliver Letwin: I am grateful to my hon. Friend for giving way as it gives me the opportunity, through him, to ask the Secretary of State a question that many of us tried to ask during her speech. Does she have any evidence that even one person among that 5 per cent. who found work would not have found work in any case?

Mr. Spring: Without proper control groups to make the comparisons, it is not possible to answer that question, but the spin doctoring nevertheless continued. It is to the Labour party's shame that it indulges in that practice.

Mr. Ivor Caplin: Will the hon. Gentleman produce for the House the evidence that shows that the hon. Member for West Dorset (Mr. Letwin) is right? There is none.

Mr. Spring: The point is that control groups are needed to measure such things accurately.

Mr. Burns: My hon. Friend talks about spin doctoring. Is he aware—I am sure he is—that the Secretary of State, in her infamous press release, failed to point out that, of the 8,600 or so people who were written to, almost 75 per cent. did not bother to reply? Of the 433 people who found work, the 13 in east Sheffield are in their 30s or late 30s—they had obviously wanted to stay at home until their children were of school age, then sought jobs and got them. It was the interviews on the "Today" programme.—

Mr. Deputy Speaker (Mr. Michael Lord): Order. I remind all hon. Members that interventions should be brief.

Mr. Spring: I am grateful to my hon. Friend, who is absolutely correct: there is no absolute evidence to prove that, as a result of the right hon. Lady's manoeuvrings in this direction, one extra job has been created.
That leads me on to a matter on which the right hon. Lady touched when she was summing up. At the end of the day, a growing economy is absolutely crucial as it provides jobs, and the last thing it needs is an artificial barrier to job creation. The reason that there has been such a dramatic fall in this country, most notably this year in full-time unemployment, is that, in contrast with what happens elsewhere in Europe, we do not have policies like the minimum wage and elements of the social chapter.
No matter how the welfare-to-work programme proceeds, we need a growing economy and job creation opportunities, but the reverse will occur if we introduce artificial creations such as the minimum wage and if other regulations come in via the back door of the social chapter. They will cause precisely the horrific mass unemployment that exists in continental Europe.

Dr. Phyllis Starkey: Will the hon. Gentleman admit that many of our European partners have had what we have not had until now, namely a comprehensive child care strategy? Most women on the continent take for granted standards of child care provision that women in this country have long awaited and which we are now looking to a Labour Government to deliver.

Mr. Spring: I remind the hon. Lady that unemployment in countries such as France and Germany is 12 or 13 per cent. What hope is there for young people entering the labour force when one quarter of people aged under 25 in France, one third of young people in Italy and about 40 per cent. of young people in Spain are unemployed? Such figures result directly from the imposition of artificial barriers to job creation, with which the Government intend to destroy employment.
I turn to the other regrettable element of spinning. We had an exciting announcement of £300 million-plus for after-school clubs and child care clubs for lone parents. [HON. MEMBERS: "Hear, hear."' I am glad that Labour Members and the Minister for Welfare Reform have something to cheer about. It must be very difficult for the right hon. Gentleman to sit next to the Secretary of State and look cheerful.
Of the £300 million, £220 million was taken out of lottery funds. The whole point behind the founding of the lottery was to help art, heritage and sports. Now, the principle of additionality has been flouted. I forecast that this is the thin end of the wedge. Every time the Government want to put money into some scheme, they will find some way of raiding the lottery, to the disadvantage of all its beneficiaries, flouting the very principle on which the lottery was set up.
I will quote from the Labour party manifesto, which as an historical document will increasingly be regarded as very different from what I suspect the Secretary of State imagines. I hope that she will listen very carefully. It says:
People are cynical about politics and distrustful of political promises. That is hardly surprising.
After the Secretary of State's performance, the way in which the Government have conducted themselves, all the nods and winks and all the promises to the most vulnerable people in our society, I hope that she will take their concerns on board. Certainly, her Back Benchers are doing so.

Mr. Michael Wills: The debate is of great interest to my constituency, especially to the 6,000 lone parents and 22,000 pensioners in Swindon, who overwhelmingly voted Labour on 1 May because they knew that a Labour Government would provide them with the opportunities denied to them by the previous Government.
I do not know why the Conservatives tabled the motion. It seems to have no point whatever—apart from allowing a little gratuitous abuse and somehow suggesting that they are anxious about the plight of lone parents, that they support people with disabilities and are the protectors of pensioners. Nothing could be further from the truth. The truth is that they did nothing to help any of those people during their 18 years in government.
If we want to know what the Conservatives really think about the issues for which they have suddenly discovered concern, we should look not at the motion but at what the shadow Cabinet have written and said before today. I also have some quotations, which, with the House's indulgence, I shall read.
This is the shadow Secretary of State for Trade and Industry expressing his understanding of the situation of lone parents:
The natural state should be the two-adult family.
What, in his considered view, does that make lone parents?
This is the shadow Secretary of State for Social Security, who is no longer present, expressing in October his respect for all the hard work and love that most lone parents put into their families:
Single parent families are more likely to be caught up in crime.
Really?
This is the shadow Foreign Secretary's considered judgment on lone parents: single mothers often prove to be inadequate parents because
since the state is educating, housing and feeding their children, the nature of parental responsibility may seem less immediate.
Earlier in the same speech, the right hon. and learned Gentleman said that the Government
must examine all our policies to ensure that we are reinforcing rather than weakening a sense of responsibility",
so I assume that he is moving towards suggesting that the state should no longer educate, house and feed the children of single mothers.
The Conservative party made some of the neediest and most vulnerable members of our society the target of cheap political jibes, appealing to the most graceless and mean-spirited instincts of a mean-spirited and graceless Government. In 18 years, the Conservatives did nothing to help lone parents, nothing to help those with disabilities and nothing to help pensioners. On the contrary, it was central to their political philosophy to exclude such people. The difference between the Conservatives and Labour is that this Government will provide new opportunities to those who need them most, and not take them away as the Conservatives did.

Mr. Rendel: I can understand how providing people with the opportunity to work may raise their status, but will the hon. Gentleman explain how benefit cuts can do so?

Mr. Wills: If the hon. Gentleman will be patient a little longer, I will come precisely to the state of the budget.
This Government will help people and give them new hope and new opportunities not by short-term patch-and-mend measures but by a transformation of the welfare state to ensure that it is relevant to the needs of people today.
The welfare state that we inherited was created in the first half of the century for the circumstances of the first half of the century. As the House knows, it was built to help people through particular crises in their lives; recognising that they needed help when they were not able to work to provide for themselves; supplying free health care so that medical treatment could be received without plunging families into poverty from which they could not recover; providing benefit to tide families through periods when the breadwinner or breadwinners were out of work, without plunging them into debt from which they could not recover.
Vital as those measures were—everyone in the Labour party remains proud of the part that our party played in putting those measures into practice—people did not and could not envisage the problems that this country faces today. Large numbers of our citizens are excluded from the rewards of mainstream society because they lack work and are given no hope of working. Nearly one household in five with someone of working age has no one in work. That is a damning indictment of 18 years of Conservative government. For many, unemployment is not a cyclical phenomenon which they suffer along with their neighbours in the hope and expectation that sooner or later they will work again: it is an inescapable blight which sets them apart from their neighbours and offers them no hope of a better future.
Surely it is time for the welfare state to play its part in tackling those problems. The country should not take the short-term view that, somehow, we can just muddle through again. This Government will rebuild the welfare state around work, giving everyone the choice and opportunity of work. This Government will make the welfare state the opportunity state, giving everyone the opportunity to make real choices about their lives.
Choice and opportunity are principles of which the Conservative party is supposed to be in favour. The difference between the Conservatives and us is that this Government believe in choice and opportunity for everyone and in making those choices and opportunities real—real for the lone parents who the Government will help find work, which will make them on average £50 a week better off than if they had remained on income support. That is no deceit, as has been suggested. That is a fact.

Mr. Letwin: Will the hon. Gentleman give way?

Mr. Wills: If the hon. Gentleman will bear with me, I will not give way. I have had 18 years to listen to him; he should give me 10 minutes.
We are going to make choice and opportunity real for lone parents who want to find work—part time or full time—and who want not just the extra income, which is important and precious to those living on the margins of society, but the sense of being reconnected to the world outside the home. They have been prevented from finding such reconnection by the lack of affordable child care. This Government are committed to providing affordable and accessible child care for everyone.
We will spend £300 million to provide after-school club places for up to 1 million children. That is 10 times more places than there are now. We will spend £25 million to provide the new deal for those who have children under five and want to take part. When we talk about opportunity and choice, we mean to make it possible for everyone. That is the difference between us and the Opposition.
We will tackle the exclusion of people with disabilities by developing an approach that focuses on their abilities. The Government will spend £195 million to provide opportunities to work for those people. We will give them opportunities and choices. What did the Tory Government ever do to enhance opportunities and choices for disabled people? This Government will tackle the discrimination that so often denies opportunity to people with disabilities by establishing a disability rights commission. What did the Tory Government ever do to give teeth to measures to protect the civil rights of people with disabilities? They have no answer.

Mrs. Angela Browning: We introduced the Disability Discrimination Act 1995. I am sorry that the hon. Gentleman is not prepared to recognise that.

Mr. Wills: I thank the hon. Lady for her intervention, but I am afraid that she did not hear what I said. I asked what you ever did to give teeth to measures to protect people with disabilities and your answer said it all.

Mr. Deputy Speaker: Order. The hon. Gentleman has used the words "you" and "your". The Deputy Speaker is not responsible for those matters. I know that the hon. Gentleman is a new Member, but I should be grateful if he would try to use normal parliamentary language.

Mr. Wills: I apologise, Mr. Deputy Speaker.
We have to recognise that placing work at the centre of the welfare state means setting priorities. That is the inescapable and inevitable task of government. The nub of the matter is that government means making hard choices, and that is what the Government have done. Within resources, which are inevitably and always restricted, we have made work—and the opportunities and choices that flow from it—our priority.

Mr. Nick Gibb: I am grateful to you—I mean to the hon. Gentleman—for giving way. Is it not true that the present Government will never get any policies through the House which require hard choices because his hon. Friends will not allow it?

Mr. Wills: I am grateful to the hon. Gentleman for that intervention, and for making the same mistake as I did. I can only tell him to wait and see.

Mr. Marsha Singh: Does my hon. Friend agree that the whole basis of the Tories' argument today is to ask us to break manifesto commitments? That is not surprising, because their history in government was to break promise after promise. They have forgotten how to keep manifesto commitments, but we have not.

Mr. Wills: That is right, and I agree with my hon. Friend. Taking hard decisions and making hard choices is the mark


of a Government who are determined to ensure that everyone has the opportunity to make the most of themselves. That means that we must make commitments that are sustainable. We will not make the mistakes made by previous Governments and make promises that we cannot keep. There is little more cruel than holding out hope only to snatch it away. We shall not do that. We shall deliver on our promises, unlike the Conservative party.

Mr. Letwin: Will the hon. Gentleman explain how he believes that failing 95 per cent. of the lone parents to whom letters were sent constitutes keeping promises to 100 per cent. of them?

Mr. Wills: I fail to understand what the hon. Gentleman is talking about. What does he mean by failing? We have been in government six months and we have already done more than the Tories did in 18 years. The word failure comes ill from the hon. Gentleman's lips.
To deliver on our promises, we have to keep public finances under rigorous control. We have to set clear priorities and ensure that public spending meets those priorities. That is what we said that we would do, and that is what we shall do. We shall ensure that our commitments to lone parents, people with disabilities and pensioners are sustainable throughout the lifetime of this Parliament and beyond.
A Government taking necessary, hard decisions need no sanctimonious, self-righteous lectures from the Opposition, who did nothing for so long. Important as work is to our reforms of the welfare state, we must recognise that some people are no longer able to work. It is bad enough that the Opposition should pretend to be the friends of lone parents and people with disabilities, but even the Conservative party should blush at pretending to be the friend of pensioners.

Mr. Gibb: Will the hon. Gentleman give way?

Mr. Wills: I will give way when I have made my point about the mis-selling of private personal pensions.
Not only did the Tories create a situation in which so many people were so damaged by the mis-selling of private personal pensions, but they failed to do anything to put it right. The Tories abandoned the pensioners but now pretend to be concerned about them.
The Labour Government are delivering on our promises to pensioners. We shall be judged by the outcome of our reviews on how we get help to the poorest pensioners. We shall be judged by the fact that we have cut value added tax on fuel to 5 per cent. and reduced the gas levy to nothing. We shall be judged by the fact that we have helped pensioners with their winter fuel payments. We will give £50 to 1.7 million pensioners on income support and £20 to 5 million other pensioners. We are also proud that the Government acted promptly and decisively to put right the scandal of the mis-selling of private pensions.

Mr. Gibb: How does the hon. Gentleman consider it to be friendly to future pensioners to support a Government who, through tax, will take £5 billion of assets from private pension funds each and every year?

Mr. Wills: The hon. Gentleman has misunderstood the difference between a tax and a reform of the corporate tax system. If he would like to have the difference explained to him, I shall be happy to do so after the debate.
I have spent much of the past 20 years listening to the Tories talk about choice and opportunity, and I fail to understand why they oppose the measures that the Government are introducing to increase opportunity and choice for everybody. Are the Tories opposed to spending £300 million on implementing a national child care strategy? We do not know.

Mr. Letwin: Will the hon. Gentleman give way?

Mr. Wills: If the hon. Gentleman will answer my question, I will give way to him.

Mr. Letwin: Does the hon. Gentleman agree that such expenditure would be valid if it worked, but invalid if it did not? Does he further agree that the evidence of the 95 per cent. of people who did not succeed in getting a job after they received letters suggests that it did not work?

Mr. Wills: I was under the impression when I gave way that the hon. Gentleman was about to answer my question rather than to ask me one. He obviously does not know whether he welcomes £300 million being spent on child care. Perhaps he can give us an answer when we next debate the subject.
Do the Tories want to see child care facilities in every town, helping parents who would otherwise not have access to affordable child care? Do the Tories want to see measures to encourage lone parents back into work? Do the Tories support the payment of £50 to Britain's poorest pensioners to help with winter fuel bills? They do not know. That, in a nutshell, is the sum of their attitude to the neediest and most vulnerable members of our society.
Why cannot the Tories, just once, welcome what the Government are doing? After all, the Labour Government are taking these steps within the spending limits set out by the previous Government. The Tories failed to take such measures. Why cannot they welcome the fact that we are now succeeding? We are providing genuine choices and opportunities within a rigorous, prudent and therefore sustainable financial framework. The truth is that the Opposition cannot and will not welcome any of that because their motion is no more than shoddy political opportunism, the worst sort of gesture politics. They are pretending that they have answers and concerns about the neediest and most vulnerable people in our society when they did nothing for them in 18 years.
This Government offer the only sustainable and practical help for pensioners, people with disabilities and lone parents. I hope that the House will treat the motion as it deserves and vote it down.

Mr. David Rendel: I am grateful for the chance to participate in this debate, because it is clear that three different points of view on welfare and, in particular, the cuts in lone parent benefits are held in the House. One view is held by the Conservative party, another by the Government and a third by the Liberal Democrats and, I understand, rather more than half of the Government's Back Benchers. It is important that that third view should be heard and I look forward to stating it.
Before I do, I must return to the speech made by the hon. Member for North Swindon (Mr. Wills), on whom I intervened when he was complaining that the previous


conservative Government had reduced the status of lone parents. I agree that that is exactly what they did. I asked him in what way reducing benefits for lone parents would increase their status. He promised he would come back to the subject. I listened to the rest of his speech, but heard not a thing about it. If he would like to intervene, I would welcome the answer to that question.

Mr. Wills: I am sorry the hon. Gentleman did not understand what I was saying. I made it clear that the Government had to set clear priorities for how they would spend a finite sum of money. They have made it clear—and I support them—that their priority must be work and the choices and opportunities that flow from it. I hope that that is clear. We have to help people back into work.
The people who are already in receipt of benefits will not suffer any cash disadvantage, but will carry on just as they are. We are talking about the future and we must re-build the welfare state of the future around work. That is this Government's priority. We made it clear before and during the election, and we are now delivering on what we made clear then.

Mr. Rendel: I am sorry to say that that gets us no further. I asked the hon. Gentleman in what sense reducing benefits for lone parents increases their status. He talked about all sorts of other priorities with which I may agree, or not, but they are irrelevant to the question. Does he think that that enhances the status of lone parents or not? Is he prepared to intervene again? I am happy to give way if he wants to answer.

Mr. Wills: At risk of carrying on, I said that there will be no cuts for lone parents who are in receipt of those benefits. Before the election and just last week, I met lone parents on the most rundown estate in my constituency. The message is that they want child care more than anything else, both those who want to go into work and those who merely want some break from their existing burdens. That is the truth. That is what they want and that is what we are delivering. If the hon. Gentleman—

Mr. Deputy Speaker: Order. Interventions are getting longer than speeches. The hon. Gentleman will please resume his seat.

Mr. Rendel: Thank you, Mr. Deputy Speaker. It is clear from that waffle that the hon. Gentleman does not have an answer to my question. It is also clear to every hon. Member that reducing benefits for lone parents will reduce their status. Perhaps 250,000 lone parents will not get the lone parent premiums next year. These will be the new claimants and their status will undoubtedly be reduced in exactly the same way as happened the previous Conservative Government. I hope that Labour will take that fact on board.
I must refer briefly to the speech made by the Secretary of State: I am sorry that the right hon. Lady is not in her place to hear my response. Her speech was an inadequate answer to the worries of Labour Members, in particular, about lone parent benefit cuts. At the heart of her speech were several illogicalities, not least her failure to answer my intervention, when I asked in what sense she felt she was targeting the most needy by reducing benefits to lone parents. She claimed that she wanted to target the most needy as well as to provide work for lone parents; she

also wants to target those who do not get work, yet she is reducing their benefits. That is illogical, as anyone can see—it does not take a great genius to see it—but it was her argument in defence of her policies.
Frankly, it was pathetic and inadequate—one of the weakest arguments I have heard from a Secretary of State in support of a policy that is admittedly pretty indefensible. I do not think that her speech will have convinced many of the Back Benchers who have shown their unhappiness with the way in which she has been pushing through the cuts.
Liberal Democrat Members welcome help for job seekers and we welcome the fact that lone parents who want work are being given help to get it. We welcome too the availability of more child care. The problems that women experience because of the lack of child care are well known. We also welcome any help that can be given to enhance the possibilities for child care, as long as it is high-quality child care that avoids the dangers of child abuse that we have seen all too often. We welcome all that.

Jacqui Smith: Bearing in mind the fact that the Liberal Democrats opposed the windfall levy that has raised much of the money that can now be put into welfare improvements, how can the hon. Gentleman justify demands for even more expenditure?

Mr. Rendel: I am not justifying demands for more expenditure. The whole point is that, at present, the benefit cuts have not been made—they are in the Budget. There have been huge savings in benefit payments this year because of the unexpected fall in unemployment. The money is there if we want to spend it in that way.
The Secretary of State missed the point, as did the hon. Member for North Swindon. The point is not what will happen to the women 
who are able to get work thanks to the policies that the Government are trying to implement and which we welcome, but what will happen to the others. There will always be a number of lone parents who, for good reasons, do not take up work—either they do not want to because they want to look after their children, or they cannot because they do not have the relevant skills or live somewhere that makes it difficult to get work.
The Secretary of State said that she is worried that 50 per cent. of married mothers go out to work but only 25 per cent. of lone parents work. She said she wanted to raise that 25 per cent. to 50 per cent., on the assumption that lone mothers and fathers would want to work in the same proportion as married mothers. That is not necessarily the case. There is a good argument for saying that lone parents may believe that it is even more important for them to stay at home with their children since they are the lone parent and it is more important for their children to have someone at home the whole time.
Even if work is as attractive to lone parents as it is to married mothers, given the Secretary of State's figures, 50 per cent. will still choose to stay at home and look after their children and it is those lone parents who will be bitterly affected by the Government's policies if they are allowed to go ahead.
All the Secretary of State's arguments and those of the hon. Member for North Swindon about the importance of prioritising and getting people back to work miss the point


about those who do not go back. They have failed to answer that point and they will need to do so before 10 December if they are to get their Back Benchers back on board on this issue.
The Secretary of State seemed to be using the old argument that attack is the best means of defence; that the best strategy is to attack the previous Tory Government for their mistakes—which some Conservatives have been good enough to admit, to some extent at least—but in so doing, the right hon. Lady failed to answer the pertinent points that my hon. Friends and I, as well as many Labour Back Benchers, have been making about the failures of her present policies.
The motion seems to be in three parts. The first concentrates on pensions and welfare reform. We all accept that that is a long-term business—that is true of pensions by their very nature—so it is important to have consensus on how pensions reform, in particular, should be handled.
I welcome the opportunity that all hon. Members have been given to join in the review. It is much more important to get it right now than to speed it through quickly and perhaps make mistakes. I do not accept the Tory view that we should rush it through as quickly as possible. We need to find an agreement that will give stability to pensions reform.
The third part of the motion concerns disability benefits. Some worrying rumours have been circulating—even if some of them originate with Conservative Members, as was said earlier. The rumours suggest that the cuts in disability benefits may be much greater even than those for lone parents. If the Government cannot reassure us about their real plans in the debate today, which they have not so far done, I am sure that many people with disabilities will remain worried.
In the Government's amendment, the only mention of people with disabilities is a passing reference to trying to help them get back into work. I would welcome any such help, but if that is all the Government intend to talk about it seems that they are not prepared to give the reassurances for people with disabilities that are being sought.
It is ironic that the hon. Member for Chingford and Woodford Green (Mr. Duncan Smith) and his hon. Friends should express a new-found compassion for the disabled. It struck me as being like cannibals suddenly deciding that they are in favour of vegetarianism. The Conservative motion uses the word "inconceivable". It seems pretty inconceivable that the Tories have had a Damascene conversion to caring for the needs of the disabled, which certainly did not concern them when they were in power. I hope that the Government will take the opportunity to reassure people that disability benefits are safe in Labour hands.
The second part of the Conservative motion concerns lone-parent benefits. It is odd that the Conservatives do not congratulate the Government on their U-turn, which picks up the very policies that the previous Government wanted to implement. The shadow Secretary of State has told us with commendable honesty that he would have implemented those policies had his party remained in power. The Labour Government are implementing Tory policies.
The sad fact about the Tory attack is that they forced the Government to defend the U-turn rather than the policy itself. The excuse offered by the Secretary of State and others for the U-turn is that they are providing help to get lone parents back into work, but Government figures show that in practice they do not expect any more lone parents to be back in work next year than this year. Presumably, then, they are not expecting their policies to be all that successful.
Lone parents are being sacrificed to save Labour's reputation for keeping its promises; but the Government will not even succeed in that, because, to keep the promise that they will stick rigidly to Tory spending plans, they have had to break the promise that they would revoke the benefit cuts. Lone parents are being sacrificed for nothing.
There is no need for the Government to break their promise to reverse the cuts because there have been considerable cuts in spending on benefits this year as a result of the unexpectedly large fall in unemployment and money is available within the benefits budget. It is true that the Government could not stick rigidly to every part of the Tory spending plans, but they could certainly stick to the overall budget without implementing the cuts.
The Government are playing the welfare-to-work line hard and saying what an excellent policy it is. Benefit cuts for lone parents are in themselves a disincentive to getting work: partly because lone parents will not gain so much by getting work once the cuts have been made; partly because those who receive the premiums have to take an additional risk if they accept a job now, because if they lose the job and go back on benefits they will have lost their premiums. The cuts make it more unlikely that lone parents will go back to work: the precise opposite of the whole basis of the welfare-to-work policy.

Mr. Letwin: Perhaps the hon. Gentleman is about to say that, according to the Government's own recent production, "The Modernisation of Britain's Tax and Benefit System", 26 per cent. of those interviewed mentioned the issue of jobs being temporary, and 23 per cent. mentioned worries about reclaiming benefit after a short period of work, as reasons for not taking work.

Mr. Rendel: I was not about to cite those statistics, but I am delighted that the hon. Gentleman has.
It is clear from Government statistics, as was clearly explained in the Standing Committee on the Social Security Bill, that lone parents—not all, but the majority —are among the poorest members of our community; most of them are below the poverty line. Some may go back to work and thereby become better off, but many will not; even the Secretary of State has accepted that probably 50 per cent. will not. All those very poor people will be made even poorer by the Labour Government. Not all that many people who voted Labour in May thought that they were voting to make poor people even poorer.
In November 1996, the Secretary of State, then in opposition, said:
Lone Parent Premium recognises that lone parents face additional costs in bringing up their children-they do not have a partner's time or income to help with children".
That is right. They are already extremely poor.
It seems to me that the Labour Government are falling into the age-old Tory trap of thinking that the way to get poor people to work is to make them even poorer while the way to get rich people to work is to make them richer. I do not believe that both assertions can be true at the same time.
The right hon. Lady continued:
The way to get lone mothers out of poverty and cut spending on benefits for them is not by cutting the amount on which they have to live year by year and plunging them into further poverty.
She then said that the proposals of the right hon. Member for Hitchin and Harpenden (Mr. Lilley) would make
hundreds of thousands of the poorest children worse off."—[Official Report, 28 November 1996; Vol. 286, c. 500–1.]
Elsewhere, the right hon. Lady said:
Since one parent benefit is not taxed, it helped to bridge the gap between welfare and work. Its abolition will make working lone mothers worse off and will discourage work amongst this group".
Again the Secretary of State's own words prove the fallacies in her current policies.

Mr. Webb: I reassure my hon. Friend that it is not just the Secretary of State who holds such views. Is he aware that the Under-Secretary of State for Education and Employment, the hon. Member for Newport, East (Mr. Howarth), said before the election that the abolition of one-parent benefit would be directly contrary to a rational welfare-to-work strategy?

Mr. Rendel: I am grateful to my hon. Friend for that intervention. I am sure that he agrees that, quite apart from the two people we have mentioned, many others on the Government Front Bench and Labour Back Benches have made similar statements in the past.
In their amendment, the Government congratulate themselves on their welfare reform. I should like to mention another aspect of their reforms—their refusal to allow the backdating of benefit claims for more than one month. The Conservative Government accepted that there should be no backdating beyond three months, but the Labour Government have gone further and done something that is even harsher than what the Conservatives introduced.
It is not a question of the Labour Government fulfilling promises to stick to Tory budgets or spending plans—they are going further and making life even harder for those who are least well off. Their policy will hit the worst-off members of our community. It seems that the Labour party—new Labour, the new Tory convert—is shouting, "Whatever you can do that's cruel, we can do something even crueller." I do not believe that that is what it was elected to do.
The Labour Government believe that there should be no backdating beyond one month and that there is no excuse for late claims, not even when a claimant has good cause—such as being widowed, by which they may be extremely traumatised. Such good causes will be swept away by new Labour in an apparent bid to outdo, not just maintain the same strategies as, its Tory teachers. It is a tragedy that in the playground game that is being fought out over who can be toughest, those in need are suffering every day the Government continue in office.
I urge Labour party members, not just those in the House but those outside it, to think about why they joined the Labour party. It was not, I suggest, to introduce

Conservative spending plans and Conservative social policy. Of that I am sure. I ask those in the Government who still have the courage of their convictions and who share our disgust at the Government's handling of social security to vote with the Liberal Democrats against the Government's benefit cuts.

Caroline Flint: I am very interested in what the hon. Member for Newbury (Mr. Rendel) said, but I do not need to take lessons from the Liberal party, which voted against the windfall levy and therefore would have put a stop to the new deal programme. It takes some brass neck for Conservative Opposition spokespersons to attack new Labour's strategies to tackle the reform of the welfare state after the disaster that they left after 18 years of Tory mismanagement and lack of imagination.
Before I outline why we need a new direction and vision for welfare reform, we should remind ourselves—it is important to continue to do so during the debate—what the Conservatives contributed to the welfare system when they were in government. While the Conservatives were in government, taxpayers picked up the bill for mass dependency on benefit, persistent unemployment, huge subsidies for low pay and widespread fraud. It was truly a nation on benefit.
Under the Conservatives, overall benefit expenditure rose by £40 billion in real terms. The proportion of the Department of Social Security budget spent on means-tested benefits more than doubled from 17 per cent. to 36 per cent. The number of people dependent on such benefits doubled from one in 12 of the population to one in six. The proportion of total public spending accounted for by the DSS went up from one fifth to one third.
What was there to show for all the increases in social security expenditure? Did more people move from welfare into work? No. One fifth of all households had no one earning a wage. Was there a reduction in benefit fraud? No. Up to £2 billion was being lost every year through housing benefit fraud alone, while expenditure on housing benefit doubled in five years. Were there any increases in the basic rate of pay among the low-paid? No. Under the Conservatives, low pay cost the taxpayer almost £4 billion annually in benefits to top up income—the equivalent of 2p on the basic rate of income tax.
Did Conservative policies lift more people out of poverty? No. The bottom 10th of the population were 13 per cent. worse off in absolute terms and the proportion of households living in poverty more than trebled from one in 14 to one in four. As the climate of insecurity and social failure moved on apace, so Britain's crime industry had its boom years under the Conservatives.
What was the great pensions achievement of the Conservative years? Pensions mis-selling soared to new heights, which damaged living standards—and it was left to the new Labour Government to rectify a problem that they should never have inherited. Let us be very clear: the Tories' record increase in social security spending was not an explosion of generosity: it was purely the cost of social failure.
Under the Conservatives, secure employment was undermined; traditional industries were savaged; the unemployed were blamed and lone parents were made the scapegoats; there was under-investment in young


people; and people were removed from the unemployment register and put on disability benefits, thereby consigning them to a workless life. I remind the House that I have direct experience of the previous Government's policies and how they affected people working for Remploy, the Government's sheltered employment scheme for disabled people. I know only too well that compulsory competitive tendering had a huge effect on the employment of people with disabilities in that sector, so forgive me if I decline to take a tutorial in compassion from Conservative Members.
I shall now consider some principles on which we should all agree. First, parents are financially responsible for their children. That principle has been recognised whenever the House has discussed child support legislation. It would have even wider support if the operation of the Child Support Agency was seen to be fair and efficient. I am pleased that my hon. Friends have pledged to tackle that problem through a widespread review.
Secondly, the best form of welfare, and the one preferred by the great majority of people, is work. That principle has only been undermined by the inability of the Conservative party to reform the tax and benefits system to remove poverty traps and to ensure that work pays. Finally, the welfare system must help people through hard times and, where possible, help them support themselves independently once more. It should help people to contribute to and prosper in their retirement, so reaping the benefit of a lifetime in work. Let us not forget that our benefit system was created to help people through short-term hardship. It was only the Conservatives' lack of vision that consigned people to a lifetime of dependency.

Mr. Gibb: How does the hon. Lady envisage the abolition of tax credits for dividends paid to pension funds, which will extract £5 billion a year from our nation's private sector pension funds, helping people to enjoy their retirement?

Caroline Flint: I believe that that fiscal reform helps to reform the corporate tax system. We are setting out to ensure that the many people with private and personal pensions are protected by safeguards that guarantee that their pensions are in the hands of those who will invest them wisely. That will sit nicely alongside a number of reviews that will take the pension arrangements for everyone into the 21st century.
I am proud that new Labour is beginning to prioritise work over welfare and opportunity over waste. I am proud that we will give effect to our principles in the face of enormous social change. This Government will face up to the growing number of women who need and want to work, to the changing nature of family life and to the consequences of family breakdown. There are few jobs for life, and the tax and benefits system must meet the challenge of changing work patterns and frequent movements from job to job.
I have heard Opposition Members suggest that the Government should be embarrassed that we opposed Conservative benefit cuts in opposition, but are accepting them now we are in government. That taunt is nothing but

hypocrisy of the highest order. As the previous Government offered nothing to lone parents—no job opportunities, no help, no new deal—but just blamed them for society's problems, it is quite right that they should now stand charged by Labour as offering nothing but increased child poverty.
If the Conservative Government had offered active support for lone parents, if they had offered a national minimum wage, if they had offered a new deal financed from a windfall levy, if they had offered a national child care strategy, they may have deserved Labour support, but Britain's lone parents and their children have had to wait too long for a Labour Government who will begin to support them in overcoming the obstacles to work and help them to do better for their families.
New Labour never said that social security cuts would be restored. In the past few days I have made it my business to check all the daily briefs that I received when I was a candidate, as well as our policy handbook and guide, and none of them contained that commitment. It was not contained in the manifesto on which our candidates fought and won the general election. Our pledge was to stay within spending limits rather than raise income tax and to begin a thorough reform of the welfare state.
I should remind hon. Members on both sides of the House who believe that we should have restored the cuts that a long line of people who come to my surgeries saw their living standards cut during the Tory years and would like help today if the public purse were deep enough. What we offered the public was to use the country's taxes better. We promised lone parents new pathways to work, a national child care strategy, better training and a proactive employment service. There have been many comments today—

Mr. Letwin: rose—

Caroline Flint: I am sure that the hon. Gentleman is rising to say something.
There have been many comments today about our pilot schemes and how succesful or otherwise they have been. As one who has been working hard on the new deal this summer, I know that we are fighting against a backlog of cynicism and mistrust because our employment services have not been used effectively over the past 18 years. It is therefore no wonder that there may be a slow move forward, but it is important that the people who have come forward have gained something from the service. I am confident that they will spread the word to other people who have yet to come forward.

Mr. Letwin: As the hon. Lady develops her interesting line of argument, will she explain how the imposition of a national minimum wage, which will exclude from work some of the lone parents of whom she talks by pricing them out of it, will assist them?

Caroline Flint: There is no evidence that a national minimum wage, which will be set at a reasonable rate by the Low Pay Commission, will put people out of work. Conservatives argued that equal pay legislation would lead to women not taking up jobs, but that did not come to pass. As has been recognised by employers, the national minimum wage will raise the floor on wages so that


employers can be seen to offer a decent wage for a decent job. During the general election campaign, many employers, from both small and medium businesses, told me that they wanted to offer a decent wage, but were being undercut by other employers who thought that, if they provided poverty pay so that the Government could bail them out with family credit, that would be a nice little earner. We have moved on from that discussion.

Mr. Letwin: In the light of that interesting answer, will the hon. Lady explain the Deputy Prime Minister's views on the matter?

Caroline Flint: The Deputy Prime Minister supports my policy and I am sure that he will be able to answer any question that the hon. Gentleman may like to put. I am here to represent Back Benchers today—I might like to represent the Front Bench in the near future.
I believe strongly that the new Government deserve support and praise for their Budget to reform tax and benefits, their policy to reduce taxation for those on the lowest incomes and the proposed national minimum wage. Those measures will make a difference.
Some hon. Members have suggested that some of the jobs on offer to lone parents are not very attractive. Many people, particularly when they return to the job market after a long break, do not move into jobs that are the best paid, the most satisfactory or the most in keeping with their skills or experience. Many of my constituents do jobs that few in this House or, dare I say it, in the Press Gallery have experienced. They work for the sake of their families. In work, even lone parents will be, on average, £50 a week better off. Once in work, their chances of moving to better paid or more satisfying jobs, to find work with more suitable hours or to have training, will improve dramatically.

Mr. Webb: Will the hon. Lady confirm that the £50 figure that has been supplied to her is based on a sample of lone parents who are already working, not those who are not working? By definition, it was worth those lone parents' while working; if that were not true, they would not have had those jobs in the first place. As a group, they have, on average, lower child care costs and higher maintenance costs than other lone parents. Can the hon. Lady confirm that a lone parent who is currently unwaged would not, on average, receive £50 a week?

Caroline Flint: That is why we need a national minimum wage. It would seem strange to promote a policy that suggests that someone should not be better off in work than on benefit.
Others have argued that in lone parent families it is detrimental to the child's welfare for the only parent to move into work, but the evidence is clear: when asked, lone parents place child care at the top of their list of demands. They do so because they know that, with work, comes a better standard of living than would ever be provided on benefits, now or in the future. The feeling of self-worth that comes with work not only benefits the mother, but provides a role model for the child.
As we move into the next century, today's and tomorrow's lone parents have better prospects of a decent quality of life than they would ever have had under a Tory Government. In four years' time, this Government will

stand judged by their record of support for lone parents, by the impact of the new deal and by the revolution that we shall see in the working of our social security system. I have every faith that the new Labour Government will pass that test.

Mr. Nick Gibb: I am looking forward to the hon. Member for Don Valley (Caroline Flint) joining the Government Front Bench, as is her wish. I believe that there will be a vacancy there shortly.
The Prime Minister has said:
A strong society cannot be built on soft choices. It means fundamental reform of our welfare state, of the deal between citizen and society.
The Secretary of State's speech gave no sign of any such fundamental reform. It was an inadequate speech, designed to save her from the claws of many of her Back Benchers, but it failed to achieve even that. The Government will be unable to pass through the House any significant welfare reform because of the views of their Back Benchers.
The Government's welfare policy and welfare reforms have become all spin and hype and no substance. One such example involves the Taylor review of the merger—the integration—of tax and benefits. When that review was announced back in June, the press lauded it. The Times of 19 June stated:
The commission, established under Martin Taylor by Gordon Brown, the Chancellor, to look at reforming tax and benefits, may well examine the integration of tax and NIC.
The Sunday Times of 18 May stated:
The aim will be to save billions in administration costs, cut down on people simultaneously paying tax with one hand and receiving benefits in the other…Tony Blair has agreed that Brown should `consider all options' for reform, including ultimately merging the separate tax and benefit operations into a new streamlined system.
The Financial Times of 20 May stated:
Mr. Taylor's appointment was welcomed by business, with tax experts predicting that the Barclays chief could recommend radical reform, including full-scale merger of the tax and benefit systems.
Mr. Taylor did little to dampen expectations".
Are the Government proposing the full-scale merger of the tax and benefit systems? Perhaps the Secretary of State or the Minister of State could respond to that point at the end of the debate.
On 20 May the Financial Times stated:
As head of the government's taskforce, his job"—
Mr. Taylor's—
appears 'almost infinite in scope'".
In reality, the review will be minuscule in scope. The truth is that the merging of the tax and benefits systems is an extremely difficult proposition and already signs are emerging that the Government are back-tracking on those over-hyped optimistic hopes about what would emerge from the Taylor review.
The 1986 social security reforms introduced by my right hon. Friend the Member for Sutton Coldfield (Sir N. Fowler), did a great deal to smooth the passage from benefits into tax and removed almost all the marginal withdrawal rates in excess of 100 per cent. However, to go further than that and to attempt to integrate the tax and benefits systems is a huge task and 


the Chancellor was wrong to announce the review in the way that he did. Patrick Minford says that to have a smooth transition from benefit into tax, one needs a personal allowance of about £10,000. Such a personal allowance would require a rise in income tax of about lop in the pound, enormously increasing marginal tax rates in this country.
Earlier this year, Chris Kelly, the head of policy at the Department of Social Security, told the Select Committee on Social Security:
it is quite important to realise that the fact there are two systems is not an accident. It is because it reflects the fact that they are pursuing different objectives to some extent".
Even Chris Kelly accepts that the two systems are totally incompatible: the benefits system requires detailed information about individuals' expenditure and needs, but the tax system requires little information—only details of income. The benefits system is measured on a weekly basis, whereas the tax system is assessed annually. The benefits system looks at families as a whole, whereas the tax system looks at individuals' income. How can the two systems be merged?
In the Select Committee, the hon. Member for Croydon, North (Mr. Wicks) asked Chris Kelly:
Is the option of a full integration"—
of the tax and benefits systems—
being considered seriously by the Taylor Committee?
The answer from the head of the DSS policy group was
A complete integration, no.
Contrast that answer with all the hype surrounding the announcement of the Taylor review back in May. The Government have announced review after review, but no real policy initiatives.

Mr. Letwin: In the course of his speech, has my hon. Friend noticed that the Minister of State—until leaving the Chamber—was saying "Hear, hear" from a sedentary position and appearing to agree whole-heartedly with my hon. Friend's views?

Mr. Gibb: I am grateful for my hon. Friend's intervention. It is true that there are members of the Government who would like to see a fundamental review of the tax and benefits system and radical reforms emanating from the Government, but the fact is that the Government are beginning to recognise that they will not get any radical reforms through the House because of Labour Back Benchers.
The report that came out with the green Budget last week, "The Modernisation of Britain's Tax and Benefit System", contained 44 pages of nothing new. All the report does is repeat the usual mantras of stability, flexible labour markets, education and welfare to work—all of which are important points, but we have heard them before. Only on page 43 of the report are Taylor and his review even mentioned. It is all hype and no reality. Even last Tuesday, the Chancellor was still hyping the report, saying:
We have concluded that, to help people move from benefits to wages, nothing less than a comprehensive tax and benefit reform and the modernisation of the welfare state are now required."—[Official Report, 25 November 1997: Vol. 301, c. 776.]

That is not what Chris Kelly thinks; nor is it the impression given by the documents.
There was hope in some quarters that the Government might be able to achieve some of the harder, more difficult, reforms that Conservative Governments had been unable to implement; but the reality is that nothing like that will happen because the Government cannot and will not be able to get their policy through the House.
If the Government cave in on the lone parent premium, or if they delay its abolition by a few months, it will be clear to the House and to the country that the Government are incapable of tackling the problems that they say they are intent on tackling, simply because their Back Benchers will not let them. They will be a lame duck Government in respect of welfare reform and the Secretary of State will be a lame duck Minister. They will trumpet and hype success, but the reality will be failure and inaction—failure in their new deal for lone parents.

Mr. Letwin: Would my hon. Friend care to join me in a speculative inquiry into whether being a lame duck is better or worse than being a drowning duck?

Mr. Gibb: I shall leave hon. Members to draw their own conclusions on that question.
Policies on the lone parent premium and the new deal have failed, with only one in 20 people responding to the letters. The Government have failed in their over-hyped policy to integrate tax and benefits and their proposed working families tax credit. After seven months in office, the Government have achieved nothing in welfare reform—it is all hype and no policy. With Labour Back Benchers beginning to emerge, Rip Van Winkle-like, from their deep slumber, it is highly unlikely that the Government will achieve anything in future.

Jacqui Smith: I shall be brief, so that other hon. Members can contribute to the debate.
When I saw that the Opposition had decided on a debate on welfare reform, pensions and disability, I asked myself what possible reason there might be for the Conservative party doing that. I thought that it might be so that Conservative Members could come to the House and apologise for the mess in which they left the country. Perhaps they wanted to apologise for the doubling of the number of those on means-tested benefits from one in 12 to one in six. Perhaps they wanted to apologise for the fact that now one in five households are workless. Perhaps they wanted to apologise for the fact that inequality has increased faster in this country than in any other major industrialised country. Perhaps they wanted to apologise for their failure to reform a complicated and slow system of benefits that encourages dependency, not work, and that traps people—

Miss Julie Kirkbride: Will the hon. Lady give way?

Jacqui Smith: No, I will not take an intervention from the hon. Lady, because she has only just turned up and I am short of time.
I thought that perhaps Conservative Members wanted to apologise for their fundamental failure to get to grips with the pension system that they implemented during


their 18 years in government, but that left current and future pensioners insecure. Perhaps they intended to come and apologise for imposing value added tax on fuel and thereby making many pensioners fear that they could not afford to pay their bills.
Perhaps they intended to apologise for having significantly failed to introduce comprehensive disability rights legislation and for having assumed consistently throughout their period in government that those with disabilities could not and did not want to work. Perhaps they intended to apologise for the fact that there are now 1 million lone parents supporting 2 million children on income support; and for the fact that the Conservative Government stigmatised those lone parents and stranded them on benefits that can never be the long-term alternative to the higher incomes that those lone parents want. However, as we have discovered today, the Opposition do not intend to apologise for any of the mess in which they left the country.
When thinking about the problems to be debated, I went back to my casework and looked at the examples that have come up in my constituency over the past seven months. I was looking for some idea of the problems that people face and the solutions that the Government can implement. The first point I recognised was that no problem is solely about benefits—we cannot think of anybody as being simply a benefits claimant. All the difficulties faced by those on benefits stem from a variety of causes and it is crucial that the Government adopt a multi-departmental approach to tackling those difficulties.
That is why I welcome the introduction of the social exclusion unit and the way in which it will work through several Departments to solve problems.
One such problem relates to young unemployed people in my constituency. There is the young unemployed man who cannot get a job because he lacks the reading and writing skills necessary for a job. He is also trapped in inadequate housing on housing benefit. I appreciate what the Government have already done in terms of the new deal, which has been enthusiastically received by the Employment Service in Worcestershire, which in turn is grateful for the opportunity to put people back to work instead of having to act as benefits police—as the service did under the former Government.
I also welcome the education White Paper, because it will tackle educational under-achievement. Welcome, too, is the release of capital receipts which will begin to solve the difficulties with housing encountered by so many people.
One unemployed man who came to see me said that he could not afford to take a job for £3 an hour because he would lose too much benefit to make that worth doing. The only way to solve that is to get rid of the benefit and tax traps by introducing a minimum wage and—dare I suggest it?—by looking to introduce a lop starting rate of tax, so as to get away from the punitive marginal rates of tax that such people face.

Mr. Webb: rose—

Jacqui Smith: No, I am short of time.
Then there is the lone parent who wants to work but who cannot because the CSA has unsuccessfully chased up the absent parent for support. This lone parent cannot receive the child care that she needs or get the training

that she wants. But the Government have clearly shown their commitment to helping such lone parents, through their review of the Child Support Agency and through the extra money that they have put into child care and training.
It is obvious that there is a great deal of work to be done still, and in a variety of Departments. It is, however, politically opportunistic of the Opposition to suggest all of a sudden that they have the answers and that they are compassionate. As we have seen today, they have no answers; they simply want to make cheap party political points at the expense of the unemployed, the lone parents, the pensioners and the disabled in my constituency. It is the current Government who are providing the answers and whom I trust to give these people hope for the future.

Mr. Oliver Letwin: The essence of this debate can be rapidly summed up. There are many Conservatives who welcomed the radicalism with which we believed the Government were entering on these matters, and who whole-heartedly accepted the good intent behind much that the Government are trying to do. Probably all of us welcome the idea of people moving back into work—of people moving off welfare—and the idea of finding suitable long-term pension arrangements. These are all common aims in our parties.
The question we are debating today, however, is whether the programme that the Government have so far brought before the public shows the least sign of achieving any of these admirable aims; or whether, as my hon. Friend the Member for Chingford and Woodford Green (Mr. Duncan Smith) suggested, it is all a mess and a muddle.
We have heard much from Labour today about the problems that they attribute to the previous Government, but little in defence of the progress that they ought to believe has so far been made by this Government. There are essentially two strands in the present Government's efforts: one relates to non-contributory and income-related benefits, the other to pensions.
In relation to the first class, there has been a devastatingly accurate critique of the Government's efforts to move lone parents back into work—efforts on which the whole of the rest of their arguments depend. That critique was not made by an opportunistic Conservative Member; it was not made with any political intent. It was made out of deep conviction and real knowledge by the hon. Member for Hackney, North and Stoke Newington (Ms Abbott) on the basis of her real understanding of the problems that her constituents face in moving back to work.
It is no answer to the hon. Lady's critique to talk about out-of-school child care, because, as she pointed out devastatingly enough, it is often the period outside school terms that causes the problem. It is no answer to talk about the amount of child care on offer because, as she pointed out devastatingly enough, in many of our inner cities the costs of child care far exceed the money on offer. It is no surprise to Conservative Members to find that the evidence so far available to the British public about how well the lone parent welfare-to-work system is working shows that it is not working. Ninety-five per cent. of those to whom letters were written have not found a job, and there is not a shred of evidence that the 5 per cent. who have would not have found one in any case.
I should like to turn briefly to pensions, where a great opportunity has surely been sadly missed. My right hon. Friend the Member for Hitchin and Harpenden (Mr. Lilley) introduced, shortly before the election, proposals that would have led to the long-term funding of the basic state pension.
In place of that, after several months of this Government, we have so far had a set of 65 questions about a so-called stakeholder pension, none of whose details have been developed. Nor is there the least sign of how those stakeholder pensions will be developed in a way that exceeds the expectations that people legitimately hold of the private sector pension schemes which already provide people in Britain with £750 billion-worth of private pensions.
In short, there is no funding of the state pension, and no alternate system sketched in sufficient detail to be worthy of the name "system". What there has been in its place is a raid on private sector pensions and a pushing of vast numbers of people back into the unfunded SERPS scheme, which the Government now tell us they intend to keep.
So whether it concerns the move from welfare to work and lone parents, or income-related and non-contributory benefits, or pensions, the Government's sole achievement has been to move a large proportion of the population back into unfunded state pensions, thereby wholly missing the opportunity to save this country from a future liability that it will not be able to bear. Wonderful though the Government's ambitions may be, the reality of their programme to date has been mess and muddle, nothing more.

Mr. Andy King: I have never heard so much rubbish in all my life as I have listened to for the past three hours from those hypocrites opposite me—

Mr. Burns: Withdraw!

Mr. King: I hope, Mr. Deputy Speaker, that that is not unparliamentary language. Indeed, I am only quoting a previous Conservative Prime Minister, who referred to you as "organised hypocrisy". That is what we have witnessed this afternoon again. It is what we witnessed time and again when you were in power during the past 18 years. You did nothing for disabled people or for lone parents; you certainly did nothing for pensioners. Over the past six months, however, the nation has been asked to believe in a Damascene conversion of your party: you are now the friends of the pensioner and of the lone parent—

Hon. Members: You?

Mr. Deputy Speaker (Mr. Michael J. Martin): Order.

Mr. King: I do apologise, Mr. Deputy Speaker, for not addressing you directly. I was of course referring to Conservative Members. I shall try not to fall into that trap again.
Let us look at what we inherited from the Conservatives. We said from the start that we would operate within the constrictions of the Budget bequeathed

to us by the Conservatives for the first two years—a Budget that included £395 million worth of social security cuts, which we also undertook to see through. The difference between us and the Tories is that we are putting in place a host of positive measures to help the groups of people who will be affected and to bring about a responsible and responsive welfare state that assists people back into work. That was, after all, the whole point of the welfare state in the first place.
Our positive strategy comprises help and advice for people searching for jobs. It will also help those seeking work to receive training, if necessary, to prepare them for the first step back into employment.
We are putting in place a proper child care strategy that will enable the £300 million for lone parents—

Mr. Letwin: If the hon. Gentleman was not asleep during my speech, perhaps he would like to answer the question: does he deny the critique offered by the hon. Member for Hackney, North and Stoke Newington (Ms Abbott), who has suggested that it is not a proper child care strategy but one that will fail?

Mr. King: I do apologise, Mr. Deputy Speaker, if I fell asleep while Opposition Members were speaking. They certainly tried the patience of all of us this afternoon, but I tried to stay awake, and yes I do agree with my hon. Friend on this side, thank you very much. [Interruption.] I agree on this side, that we are going to make these proposals work. [Interruption.] I am sorry, but we have been in government for seven months. The proposals are still very much in their infancy—they do not come into full play until next year—and already Opposition Members are undermining, or trying to undermine, a positive strategy to help people who are trapped in poverty by their cynical manoeuvring and scaremongering today. It is scandalous for a responsible Opposition to behave so irresponsibly.
I will go back to—

Mr. Webb: Will the hon. Gentleman give way?

Mr. King: No; I am sorry. We are running out of time.
We are actually going to assist lone parents with child care after school. A million places will be available, not just during term time, but during the holiday period, when those parents need that sort of assistance. The system will be flexible. At the moment, there are slightly more than 3,000 such schemes. We shall provide 30,000 such schemes, to give lone parents a true choice: a choice of participating in the job market, a choice of leading fulfilling lives in which they can hold their head up and provide for their children instead of being driven into poverty by the Conservatives' failed policies. It is disingenuous of Conservative Members to speak about our failed policies after only seven months, when they had 18 years in which they totally failed the groups that I am referring to.
The hon. Member for Chingford and Woodford Green (Mr. Duncan Smith) heralded the fact that we have the best funded system of private pensions in Europe. Well, we ended up with that marvellously funded system of private pensions because the Conservatives failed state pensioners by reducing their benefit by £20 a week,


and those people were driven to seek privately funded pensions—and, sadly, the Conservatives even let them down then.

Mrs. Angela Browning: The debate has focused primarily on lone parents and pensions. People with disabilities have also been mentioned, and, as the Conservative Front-Bench spokesman on disability, I shall focus my comments on disability.
Before I do so, I remind the Secretary of State and the Under-Secretary of State for Education and Employment, the hon. Member for Newport, East (Mr. Howarth), that my hon. Friend the Member for Chingford and Woodford Green (Mr. Duncan Smith) asked the Secretary of State a range of specific questions, to most of which we have not received answers.
I hope that the Under-Secretary will ensure that we receive specific answers to those questions. They are not posed because only we are interested in the answers. People outside the House are also interested.
Let me refresh the Secretary of State's memory. She would not answer the question when she was asked why she was implementing a policy regarding lone parents that she does not agree with and is on the record as saying that she does not agree with. She would not give a categorical answer to the question about the professionalism and the training of those who will be trained in child care. We should like to know exactly what the age group will be and what training those people will undergo.
My hon. Friend the Member for Chingford and Woodford Green posed four specific questions about disability. He asked whether those who have been awarded disability living allowance for life will be able to assume that that means just what it says—for life. In the review of disability benefits, will the Minister put at rest the minds of those people who currently receive those benefits, by telling them that the Government do not intend to tax benefits that are currently not taxed?
Will the Minister give information about the 40 organisations that the Secretary of State has claimed from the Dispatch Box that she has consulted? If I understood her reply to the House today, she was referring to organisations that she has consulted about welfare-to-work measures, when the specific question that she was asked—a very similar question to the question asked to the Prime Minister last Wednesday—was not about who had been consulted about welfare-to-work measures, but about who had been consulted about the review of disability benefits. That is the question which we want answered.
Before I continue, it may be pertinent to declare three non-remunerated interests. I serve on the council of the National Autistic Society, I am national vice-president of the Alzheimer's Disease Society and I have a dependent relative in receipt of disability living allowance for life.
The Labour party manifesto has been waved about a lot during the debate, especially from the Treasury Bench. Labour Back Benchers have referred to it, and I want to quote a few passages, because if this is to be our bible—[HON. MEMBERS: "Hear, hear."] I see that I have a captive audience. If you are sitting quietly, then I will begin.
On page 5, in the section at the start of the manifesto, which bears the signature of the Prime Minister, he says of the contract with the people:
There will be no increase in the basic or top rates of…tax.
Will the Minister confirm tonight that that means just what it says, and that the tax of people in receipt of disability benefits will not be increased because non-taxed benefits become taxed?
The Prime Minister also says:
I pledge to Britain a government which shares their hopes, which understands their fears
in reference to vulnerable people. I should like to share with Ministers tonight some of the hopes and fears expressed in correspondence that I have received from throughout the country from people who are in receipt of disability benefits.

Mr. Donald Gorrie: Will the hon. Lady give way?

Mrs. Browning: I will in a second. I want to make progress.
My hon. Friend the Member for West Suffolk (Mr. Spring) quoted from a letter that he had received. I shall quote briefly from some of the letters that I have received in the past week or two.
A retired teacher in Mid Glamorgan says:
I…refer to the stopping of the Disability Living Allowance, this money is a lifeline to disabled persons such as myself. I really believe that if this Bill is passed it will cause vast problems for disabled people".
From my constituency, a person who retired last year writes:
There can be no doubt that the peace of mind of millions of disabled people will have been seriously threatened by the government's proposals.
I have…been a member of the Labour party for over fourteen years. I have to say that I feel a sense of betrayal by the party over this issue, as do, I am sure, many other disabled and chronically sick people.
I received a copy of a letter sent to the Multiple Sclerosis Society of Great Britain and Northern Ireland, with a little handwritten note to me attached, which says:
Will you please read this letter. I have written to express my hurt and sense of betrayal".
The letter concludes:
I choose to use my benefits to employ a private cleaning firm to blitz my Home every few weeks and to make a relative an allowance to wash my hair, cut my nails etc. My Husband resigned a highly responsible job and took less hours and pay to be more available to me and I have a very supportive Daughter. I will not have strangers attending to my personal needs. My body may not be of much use but my brain still functions and above all I still have my pride.
I spent most of this morning dealing with a constituency case. A constituent from Honiton in Devon had just had the higher component of disability living allowance removed; it included the mobility component. That means that he expects that this week someone will collect the car that he uses to get about, because the payment of that benefit pays for his car.

Caroline Flint: That is not the Government's fault. We all have such cases.

Mrs. Browning: The hon. Lady may mouth all she likes. I am determined to fight this on behalf of my


constituent, because the removal of disability living allowance and the mobility component is something which the Government—

The Parliamentary Under-Secretary of State for Social Security (Mr. John Denham): The hon. Lady has no idea.

Mrs. Browning: I have every idea, and I say to the hon. Gentleman, as a carer for someone with this benefit, I will fight it, fight it and fight it on behalf of people who are vulnerable and who depend on that benefit. [Interruption.] The hon. Lady may say that I did not fight it, but I assure her that I did. Anyone who looks at my track record on what I have said and fought for in the House will see that. [Interruption.]

Mr. Deputy Speaker: Order. We can have only one speaker at a time.

Mrs. Browning: Those benefits are there now. Labour Members should take a careful look at the benefits that were introduced and secured up until 1 May. Now, we are receiving letter after letter from worried, frightened people—[Interruption.] I invite the Minister to put the record straight tonight. The Secretary of State refused to give assurances today, as did the Prime Minister during Question Time last Wednesday. If what I am saying is wrong, if it is all based on rumour, tonight is the Government's opportunity to say clearly that disability living allowance for life means just that; that such benefits will not be means-tested or taxed; and that people can go to sleep tonight feeling much more comfortable than they do now.

Mr. Gorrie: The hon. Lady has raised the tone of the debate considerably during the last minute or two. Does she agree that the Opposition made a mistake in framing their motion by criticising the Government for reneging on their policies? Surely the thrust of the Opposition's argument should be that, from their point of view, the Labour Government are adopting Tory policies. If the Opposition had adopted the advice of the Bible and taken joy in a sinner that repenteth, they might have attracted more interest in the debate among Conservative Back Benchers.

Mrs. Browning: We will support Labour policies such as the move to enable more people with disabilities to get back into work. However, the Government are promising to do that while also threatening to remove the mobility component of the DLA—

Mr. Andy King: The hon. Lady is scaremongering.

Mrs. Browning: If I am scaremongering, when I sit down in four minutes' time the Minister will have the opportunity to say categorically that what I have said is wrong and that the Government will not do it. The hon. Gentleman shakes his head—I hope that his hon. Friend the Minister will not disappoint him tonight.

Mr. Alan Howarth: What evidence does the hon. Lady have?

Mrs. Browning: My answer is to quote from correspondence I have received from organisations that

have been involved in the so-called consultation on disability benefits. The Disability Benefits Consortium represents the British Council of Organisations of Disabled People; Disability Alliance; Disablement Income Group: and the Royal Association for Disability and Rehabilitation. The consortium writes:
Disability organisations are concerned about the lack of clarity and openness about consultation and decision-making processes around these reviews. On disability benefits, there will not be any Green Paper or formal consultation before key decisions are likely to be made. A series of seminars to discuss options on 'managing' expenditure on disability benefits have been arranged by some disability organisations at the request of Baroness Hollis. It is important to note that the disability organisations attending these seminars do not regard them in any way as part of a formal consultation process.
The Royal National Institute for the Blind wrote to me only today saying:
RNIB have never before sent out a briefing to MPs containing this level of detail. This reflects the seriousness with which we regard the threat to benefits which provide a vital lifeline to those who are often amongst your poorest constituents, and those who seldom make their feelings known to their Member of Parliament.
The benefit integrity project involves people—we would welcome information on their training and experience—knocking on the doors of those who currently receive the higher componentof disability living allowance and mobility allowance. RADAR writes—

The Secretary of State for Education and Employment (Mr. David Blunkett): This is unbelievable.

Mrs. Browning: It certainly is unbelievable that so many organisations are so concerned that they feel they have to write to Members of Parliament.
RADAR, an organisation well known to many hon. Members, writes:
Organisations which had met the Department in May"—
to talk about the benefit integrity project—
believed they would be discussing findings from the…review.
Instead, they were informed that the project was already under way. The organisations that went to the Department included Action for Blind People, Disability Alliance, Mencap, RADAR and the RNIB. Those organisations went to the Department believing that they were part of a consultation, only to find that the decision had already been made and their views were not required, but that they could have an input into some sort of management.
To cap it all, the Lord Chancellor's Department is considering proposals to abolish legal aid for personal injury claims—another move by the Government which will clearly have an effect on people with disabilities and will cause them a great deal of distress.
Having heard from those organisations and having read out a small sample of letters from, I remind the Government, the people—not the people's banquet or the people's lottery, but the real people who have very real needs—I will conclude with some final words from the Labour manifesto. It claims:
Britain will be better with new Labour.
[HON. MEMBERS: "Hear, hear."] And the band played, "Believe it if you like." The manifesto said:
New Labour is the political arm of none other than the British people as a whole. Our values are the same: the equal worth of all, with no one cast aside; fairness and justice within strong communities.


There is nothing fair or just about the way that this Government treat the most vulnerable people in our society.

The Parliamentary Under-Secretary of State for Education and Employment (Mr. Alan Howarth): This has been a valuable debate, albeit all too short. I especially welcome the contributions from my hon. Friends the Members for North Swindon (Mr. Wills), for Don Valley (Caroline Flint), for Redditch (Jacqui Smith) and for Rugby and Kenilworth (Mr. King). The commitment of my hon. Friends to social justice and to an intelligent and humane modernisation of the welfare state contrasts with the absence of commitment to that project and the absence of ideas that have been apparent on the Conservative Benches.
Is it really surprising if I recall that the Rowntree inquiry into the distribution of income and wealth said that between 1979 and 1992, the poorest 20 to 30 per cent. of families failed to share in the growth of prosperity in the nation? Between 1975 and 1992, the hourly wages of the lowest paid fell. Society was increasingly polarised between work-rich and work-poor households. Society was polarised in housing tenure so that by the end of the life of the Conservative Government, 75 per cent. of people in local authority or housing association housing were among the poorest 20 per cent. of the population. That failure to enable the most disadvantaged in our society to share in the growth in the nation's wealth was a central dereliction.
As my hon. Friend the Member for Don Valley reminded us, the figures for households below average income show that whereas the top 10 per cent. of income earners increased their wealth by two thirds, the bottom 10 per cent. saw their income fall by 13 per cent. Under the Conservative Government, the rich got richer while the poor got poorer.
No one could seriously argue that it is not appropriate for a new Government taking office after 18 years in opposition to ask searching questions about the patterns of spending and administration that they have inherited. During the past 18 years, the previous Government denied that the state had a constructive and responsible role to play in welfare.
In the last declining years of the Conservative Administration, welfare policy was driven by a devastating triple combination of emergency surgery to the economy, a desperate attempt to create fiscal headroom to make it possible to reduce taxes for those already comfortably off, in a futile attempt to win an election, and a wholesale dismantling of agencies of the state, again not driven by an intelligent or humane analysis, but hypnotised by a mantra that said, "Public bad; private good."
Ministers in the previous Administration were apt to characterise the welfare state's clients as feckless, but surely it was those Ministers who, holding high office in an elected Government, yet repudiating the responsibility to create an enabling state, were feckless, which had the vast and destructive consequence of humiliating and demoralising some of society's most vulnerable members.

Mr. William Cash: Will the Minister give way?

Mr. Howarth: The hon. Gentleman has only just come into the Chamber. I will not give way to him.
Conservative Members put their faith, or perhaps found a comfortable retreat, in the trickle-down theory of wealth. The theory did not work. In the centenary year of Aneurin Bevan's birth, it has never been more important for the welfare state truly to meet the aims that it should have. The new deal for unemployed people is among our major undertakings in the reform and modernisation of the welfare state. I will not detail the new deal's arrangements because they are well known, but I shall draw to the House's attention certain characteristics of the new deal.
The Conservative party preens itself on the falls in unemployment in recent years and, of course, we all welcome those. Perhaps it is a matter of relative indifference that they occurred not by design but by accident. A previous Conservative Chancellor of the Exchequer avowed that unemployment was a price worth paying, and it began to fall only because the previous Government were hurled out of the exchange rate mechanism.
If Conservative Members think that there are grounds for complacency, that we do not need the new deal and that it will do simply to allow economic and social events to take their course, they ignore the fact that unemployment is still 50 per cent. higher than it was in 1979. It is 50 per cent. higher among young people than among other people. Male unemployment is two thirds higher than it was when the Conservative party came into office, and long-term unemployment is more than two thirds higher. Unemployment among members of ethnic minorities is particularly shaming, running at twice the rate of other communities—or even more.
Whatever the phase of the economic cycle and however strong the economic recovery, too many people and communities are never floated off the rocks. It is only right and responsible, both on the ground of humanity and in terms of the economy—enabling us to have the benefit of the contribution that those people could make to the economy and saving the economic and social costs of exclusion—that we should make this big undertaking through the new deal, which is qualitatively and quantitatively different, and better than anything that the previous Government ever did.
The Chancellor of the Exchequer has made available £3.5 billion from the windfall levy, a redistribution of windfall gains to people who have been the victims of economic change. It is eminently justified. With those resources, we shall be able to provide better, more sustained and more effective help to people who are most at risk in our society than has ever been given before.
Two features of the new deal are particularly important and encouraging. One is the principle that everyone should be served by a personal adviser, a member of the Employment Service staff. Under the previous Government, the service was required to be bureaucratic, formulaic and procedure driven. Its staff were not allowed to relate as individual human beings to clients or to give the imaginative and practical help that unemployed people need. There has been an immense welcome among the service's staff for our proposals. There has been an enormous release of energy in the service and among those with whom it develops the partnerships of the new deal.
That principle of partnership is the second feature to which I draw the House's attention. The Employment Service has enormous strengths. It is the only organisation


with the reach and presence throughout the country to be able to deliver the new deal, but the service needs to work in partnership with other organisations—with local authorities, training and enterprise councils, voluntary organisations and employers' organisations—whose strengths complement those of the service.
That is happening. We are not being prescriptive from the centre about the nature of the partnerships that should be formed locally, but we are insisting on that principle of partnership. There will be far-reaching consequences from the application of those two principles: case working and partnership.
Labour Members are proud of the welfare state, but we acknowledge that if there has been a besetting inadequacy, it has been that the person in poverty—the unemployed or disabled person—has been required to do what is convenient to the administration, rather than the administration serving the welfare state's client.
The typical experience is that the person in need has to embark on a melancholy trudge around different agencies at different addresses, with different rules, different accountabilities, different jargon and different procedures. It has been a bleak and perplexing experience. If we can achieve a better integration of services—a more holistic approach to the activity of the welfare state and to the service of people who should be its beneficiaries—we will have learnt much and developed in important respects.

Mrs. May: The Minister has said much about the new deal, about which we also heard from the Secretary of State for Social Security and Minister for Women. Is he going to answer the questions that were posed by my hon. Friends the Members for Chingford and Woodford Green (Mr. Duncan Smith) and for Tiverton and Honiton (Mrs. Browning) relating to disability benefits? In doing so, perhaps the Minister could explain how it will help people if the Government pay disability benefits to local authorities and not to individuals with disabilities.

Mr. Howarth: The hon. Lady and too many other Conservative Members have been guilty of recycling and putting into more emphatic currency a series of rumours that they know are distressing to disabled people. I do not for one second doubt the strong personal commitment to disabled people's interests of the hon. Member for Tiverton and Honiton (Mrs. Browning). She and I have, from time to time, fought shoulder to shoulder in certain causes on behalf of disabled people.
As I have said, any Government who come into office after 18 years in opposition and find a system that is such a muddle and a hotch-potch, and which so grievously fails to support the people whom we all wish it to support, are not only entitled, but have a duty, to ask searching questions.
The comprehensive spending reviews that are being conducted throughout government are designed to ensure that the Labour Government achieve the purposes that they have set themselves: to modernise Britain and to create a more just society. Hon. Members can be assured that those will be our criteria. Those factors will be paramount in any decision that is eventually taken.
As and when there are propositions for reform of the benefits system or of other aspects of the welfare state, we will consider what sort of consultation on which to

embark. The hon. Member for Tiverton and Honiton can be assured that we are not going to do the sort of terrible things that are being rumoured and which she has put into renewed circulation.

Mrs. Browning: rose—

Mr. Howarth: I have very little time. I am not prepared to have my speech hijacked by Conservative Members who want me to dance to their tune by answering a series of questions that they want to ask for political advantage. I will not play that game.
Our policy goes well beyond what the previous Administration achieved in establishing proper civil rights for disabled people. Our manifesto commitment is to comprehensive and enforceable civil rights for disabled people. We shall fulfil that commitment.
Why are the Conservatives sitting there? They have no idea what they are there to do. They have suffered their worst electoral defeat ever, but they are heading further and further towards the wilder shores of xenophobia, isolationist nationalism and social disintegration in the name of the free market. Apparently, that is to be known as Conservative populism. I hardly think that it is popular.
The British people like their leaders to appeal to their better nature and to their more responsible selves. Have the Tories not learnt that they do not have the remotest chance of governing unless they place themselves somewhere near the centre of the political spectrum, connect with the mainstream of national life and remember the deep desire of the British people for fairness and that we should be one nation?
The affectation and opportunism that we have seen from the Conservatives will not persuade any unemployed person, any pensioner, any disabled person or any lone parent that the Tories care or have rethought their policies and would act differently if they came to office.
The self-indulgent pursuit of dogma ends up hurting innocent people. It ill becomes the Conservatives to wail for the plight of the welfare state when they all but destroyed it. The new Labour Government will re-create it as a modern welfare state, fit for a just and thriving society. I ask my hon. Friends to reject the motion.

Question put, That the original words stand part of the Question:—

The House divided: Ayes 131, Noes 336.

Division No. 101]
[7.1 pm


AYES


Ainsworth, Peter (E Surrey)
Butterfill, John


Amess, David
Cash, William


Arbuthnot, James
Chope, Christopher


Atkinson, Peter (Hexham)
Clark, Rt Hon Alan (Kensington)


Baldry, Tony
Clarke, Rt Hon Kenneth (Rushcliffe)


Bercow, John



Beresford, Sir Paul
Collins, Tim


Blunt, Crispin
Cormack, Sir Patrick


Body, Sir Richard
Cran, James


Boswell, Tim
Curry, Rt Hon David


Bottomley, Peter (Worthing W)
Davies, Quentin (Grantham)


Bottomley, Rt Hon Mrs Virginia
Davis, Rt Hon David (Haltemprice)


Brazier, Julian
Day, Stephen


Brooke, Rt Hon Peter
Dorrell, Rt Hon Stephen


Browning, Mrs Angela
Duncan, Alan


Bruce, Ian (S Dorset)
Duncan smith, Iain


Burns, Simon
Emery, Rt Hon Sir Peter






Evans, Nigel
McLoughlin, Patrick


Faber, David
Madel, Sir David


Fabricant, Michael
Major, Rt Hon John


Fallon, Michael
Malins, Humfrey


Flight, Howard
Maples, John


Forth, Rt Hon Eric
Maude, Rt Hon Francis


Fowler, Rt Hon Sir Norman
Mawhinney, Rt Hon Sir Brian


Fox, Dr Liam
May, Mrs Theresa


Gale, Roger
Moss, Malcolm


Garnier, Edward
Paice, James


Gibb, Nick
Paterson, Owen


Gill, Christopher
Prior, David


Gillan, Mrs Cheryl
Randall, John


Gorman, Mrs Teresa
Redwood, Rt Hon John


Gray, James
Robathan, Andrew


Green, Damian
Robertson, Laurence (Tewk'b'ry)


Greenway, John
Roe, Mrs Marion (Broxbourne)


Grieve, Dominic
Rowe, Andrew (Faversham)


Gummer, Rt Hon John
Ruffley, David


Hamilton, Rt Hon Sir Archie
St Aubyn, Nick


Hammond, Philip
Sayeed, Jonathan


Hawkins, Nick
Shephard, Rt Hon Mrs Gillian


Heald, Oliver
Shepherd, Richard


Heath, Rt Hon Sir Edward
Simpson, Keith (Mid-Norfolk)


Heathcoat-Amory, Rt Hon David
Smyth, Rev Martin (Belfast S)


Hogg, Rt Hon Douglas
Spelman, Mrs Caroline


Horam, John
Spicer, Sir Michael


Howard, Rt Hon Michael
Spring, Richard


Howarth, Gerald (Aldershot)
Steen, Anthony


Hunter, Andrew
Streeter, Gary


Jackson, Robert (Wantage)
Swayne, Desmond



Syms, Robert


Jenkin, Bernard
Tapsell, Sir Peter


Johnson Smith, Rt Hon Sir Geoffrey
Taylor, Ian (Esher & Walton)



Taylor, John M (Solihull)


Key, Robert
Taylor, Sir Teddy


King, Rt Hon Tom (Bridgwater)
Tredinnick, David


Kirkbride, Miss Julie
Tyrie, Andrew


Lait, Mrs Jacqui
Viggers, Peter


Lansley, Andrew
Wells, Bowen


Letwin, Oliver
Whitney, Sir Raymond


Lewis, Dr Julian (New Forest E)
Widdecombe, Rt Hon Miss Ann


Lidington, David
Wilkinson, John


Lilley, Rt Hon Peter
Willetts, David


Lloyd, Rt Hon Sir Peter (Fareham)
Winterton, Mrs Ann (Congleton)


Llwyd, Elfyn
Winterton, Nicholas (Macclesfield)


Loughton, Tim
Yeo, Tim


Luff, Peter
Young, Rt Hon Sir George


Lyell, Rt Hon Sir Nicholas



MacGregor, Rt Hon John
Tellers for the Ayes:


MacKay, Andrew
Mr. John Whittingdale and


Maclean, Rt Hon David
Mr. Nigel Waterson.




NOES


Abbott, Ms Diane
Bennett, Andrew F


Adams, Mrs Irene (Paisley N)
Benton, Joe


Ainger, Nick
Bermingham, Gerald


Ainsworth, Robert (Cov'try NE)
Best, Harold


Alexander, Douglas
Betts, Clive


Allan, Richard
Blair, Rt Hon Tony


Anderson, Donald (Swansea E)
Blears, Ms Hazel


Armstrong, Ms Hilary
Blizzard, Bob


Ashdown, Rt Hon Paddy
Blunkett, Rt Hon David


Ashton, Joe
Boateng, Paul


Atkins, Charlotte
Borrow, David


Ballard, Mrs Jackie
Bradley, Keith (Withington)


Banks, Tony
Bradshaw, Ben


Barnes, Harry
Brake, Tom


Barron, Kevin
Brand, Dr Peter


Bayley, Hugh
Breed, Colin


Beard, Nigel
Brinton, Mrs Helen


Beckett, Rt Hon Mrs Margaret
Brown, Rt Hon Nick (Newcastle E)


Begg, Miss Anne
Brown, Russell (Dumfries)


Beith, Rt Hon A J
Burden, Richard


Bell, Martin (Tatton)
Burstow, Paul


Benn, Rt Hon Tony
Butler, Mrs Christine





Byers, Stephen
Gibson, Dr Ian


Cabom, Richard
Gilroy, Mrs Linda


Campbell, Alan (Tynemouth)
Godman, Norman A


Campbell, Mrs Anne (C'bridge)
Godsiff, Roger


Campbell, Menzies (NE Fife)
Gordon, Mrs Eileen


Campbell-Savours, Dale
Gorrie, Donald


Cann, Jamie
Grant, Bernie


Caplin, Ivor
Griffiths, Jane (Reading E)


Casale, Roger
Griffiths, Nigel (Edinburgh S)


Caton, Martin
Griffiths, Win (Bridgend)


Chapman, Ben (Wirral S)
Grocott, Bruce


Chaytor, David
Grogan, John


Chidgey, David
Gunnell, John


Chisholm, Malcolm
Hall, Mike (Weaver Vale)


Clapham, Michael
Hall, Patrick (Bedford)


Clark, Rt Hon Dr David (S Shields)
Hanson, David


Clark, Dr Lynda (Edinburgh Pentlands)
Harman, Rt Hon Ms Harriet



Harris, Dr Evan


Clark, Paul (Gillingham)
Harvey, Nick


Clarke, Charles (Norwich S)
Heal, Mrs Sylvia


Clarke, Eric (Midlothian)
Healey, John


Clarke, Rt Hon Tom (Coatbridge)
Henderson, Doug (Newcastle N)


Clelland, David
Henderson, Ivan (Harwich)


Clwyd, Ann
Hepburn, Stephen


Coaker, Vernon
Heppell, John


Coffey, Ms Ann
Hesford, Stephen


Coleman, Iain
Hill, Keith


Colman, Tony
Hinchliffe, David


Connarty, Michael
Hodge, Ms Margaret


Cook, Frank (Stockton N)
Hoey, Kate


Corbett, Robin
Home Robertson, John


Corbyn, Jeremy
Hood, Jimmy


Cotter, Brian
Hoon, Geoffrey


Cousins, Jim
Hope, Phil


Cranston, Ross
Hopkins, Kelvin


Crausby, David
Howarth, Alan (Newport E)


Cryer, John (Hornchurch)
Howarth, George (Knowsley N)


Cummings, John
Hoyle, Lindsay


Cunningham, Rt Hon Dr John (Copeland)
Hughes, Kevin (Doncaster N)



Humble, Mrs Joan


Cunningham, Jim (Cov'try S)
Hurst, Alan


Dalyell, Tam
Hutton, John


Darling, Rt Hon Alistair
Iddon, Dr Brian


Davey, Edward (Kingston)
Illsley, Eric


Davey, Valerie (Bristol W)
Ingram, Adam


Davidson, Ian
Jackson, Ms Glenda (Hampstead)


Davies, Rt Hon Denzil (Llanelli)
Jackson, Helen (Hillsborough)


Davies, Geraint (Croydon C)
Jamieson, David


Dawson, Hilton
Johnson, Alan (Hull W & Hessle)


Dean, Mrs Janet
Johnson, Miss Melanie (Welwyn Hatfield)


Denham, John



Dobbin, Jim
Jones, Helen (Warrington N)


Donohoe, Brian H
Jones, Jon Owen (Cardiff C)


Doran, Frank
Jones, Martyn (Clwyd S)


Dowd, Jim
Jowell, Ms Tessa


Dunwoody, Mrs Gwyneth
Keeble, Ms Sally


Eagle, Angela (Wallasey)
Keen, Alan (Feltham & Heston)


Eagle, Maria (L'pool Garston)
Keen, Ann (Brentford & Isleworth)


Edwards, Huw
Kelly, Ms Ruth


Ellman, Mrs Louise
Kemp, Fraser


Ennis, Jeff
Kennedy, Charles (Ross Skye)


Fatchett, Derek
Kennedy, Jane (Wavertree)


Feam, Ronnie
Khabra, Piara S


Field, Rt Hon Frank
Kidney, David


Fisher, Mark
Kilfoyle, Peter


Fitzpatnck, Jim
King, Andy (Rugby & Kenilworth)


Flint, Caroline
King, Ms Oona (Bethnal Green)


Follett, Barbara
Kumar, Dr Ashok


Foster, Don (Bath)
Ladyman, Dr Stephen


Foster, Michael Jabez (Hastings)
Lawrence, Ms Jackie


Foster, Michael J (Worcester)
Laxton, Bob


Foulkes, George
Leslie, Christopher


Gapes Mike
Levitt, Tom


Gardiner, Barry
Lewis, Ivan (Bury S)


George, Bruce (Walsall S)
Lewis, Terry (Worsley)


Gerrard, Neil
Linton, Martin






Love, Andrew
Pollard, Kerry


McAllion, John
Pope, Greg


McAvoy, Thomas
Pound, Stephen


McCabe, Steve
Powell, Sir Raymond


McCafferty, Ms Chris
Prentice, Ms Bridget (Lewisham E)


McCartney, Ian (Makerfield)
Prentice, Gordon (Pendle)


McDonagh, Siobhain
Primarolo, Dawn


Macdonald, Calum
Purchase, Ken


McDonnell, John
Quin, Ms Joyce


McIsaac, Shona
Radice, Giles


MacShane, Denis
Rapson, Syd


Mactaggart, Fiona
Raynsford, Nick


McWalter, Tony
Reed, Andrew (Loughborough)


McWilliam, John
Reid, Dr John (Hamilton N)


Mahon, Mrs Alice
Rendel, David


Mandelson, Peter
Robinson, Geoffrey (Cov'try NW)


Marek, Dr John
Rogers, Allan


Marshall-Andrews, Robert
Rooker, Jeff


Martlew, Eric
Rooney, Terry


Maxton, John
Ross, Ernie (Dundee W)


Meacher, Rt Hon Michael
Rowlands, Ted


Meale, Alan
Ruane, Chris


Michael, Alun
Ruddock, Ms Joan


Michie, Bill (Shef'ld Heeley)
Russell, Bob (Colchester)


Michie, Mrs Ray (Argyll & Bute)
Ryan, Ms Joan


Milbum, Alan
Satter, Martin


Miller, Andrew
Sanders, Adrian


Mitchell, Austin
Savidge, Malcolm


Moffatt, Laura
Sawford, Phil


Moonie, Dr Lewis
Sedgemore, Brian


Moran, Ms Margaret
Shaw, Jonathan


Morgan, Ms Julie (Cardiff N)
Sheerman, Barry


Morgan, Rhodri (Cardiff W)
Sheldon, Rt Hon Robert


Morley, Elliot
Simpson, Alan (Nottingham S)


Morris, Ms Estelle (B'ham Yardley)
Singh, Marsha


Morris, Rt Hon John (Aberavon)
Skinner, Dennis


Mudie, George
Smith, Rt Hon Andrew (Oxford E)


Mullin, Chris
Smith, Jacqui (Redditch)


Murphy, Denis (Wansbeck)
Smith, John (Glamorgan)


Murphy, Jim (Eastwood)
Smith, Llew (Blaenau Gwent)


Norris, Dan
Soley, Clive


O'Brien, Bill (Normanton)
Southworth, Ms Helen


O'Brien, Mike (N Warks)
Spellar, John


Olner, Bill
Squire, Ms Rachel


O'Neill, Martin
Starkey, Dr Phyllis


Öpik, Lembit
Steinberg, Gerry


Osborne, Ms Sandra
Stevenson, George


Palmer, Dr Nick
Stewart, David (Inverness E)


Pearson, Ian
Stewart, Ian (Eccles)


Pendry, Tom
Stinchcombe, Paul


Pickthall, Colin
Stoate, Dr Howard


Pike, Peter L
Stott, Roger





Strang, Rt Hon Dr Gavin
Wallace, James


Stringer, Graham
Ward, Ms Claire


Stunell, Andrew
Wareing, Robert N


Sutcliffe, Gerry
Watts, David


Taylor, Rt Hon Mrs Ann (Dewsbury)
Webb, Steve



Whitehead, Dr Alan


Taylor, Matthew (Truro)
Williams, Rt Hon Alan (Swansea W)


Thomas, Gareth (Clwyd W)



Timms, Stephen
Williams, Alan W(E Carmarthen)


Tipping, Paddy
Willis, Phil


Todd, Mark
Wills, Michael


Tonge, Dr Jenny
Winnick, David


Touhig, Don
Winterton, Ms Rosie (Doncaster C)


Trickett, Jon
Wise, Audrey



Wood, Mike


Truswell, Paul
Woolas, Phil


Turner, Dennis (Wolverh'ton SE)
Wright, Anthony D (Gt Yarmouth)


Turner, Desmond (Kemptown)
Wright, Dr Tony (Cannock)


Turner, Dr George (NW Norfolk)
Wyatt, Derek


Twigg, Derek (Halton)



Twigg, Stephen (Enfield)
Tellers for the Noes:


Tyler, Paul
Mr. John McFall and


Vaz, Keith
Mr. Graham Allen.

Question accordingly negatived.

Question, That the proposed words be there added, put forthwith, pursuant to Standing Order No. 31 (Questions on amendments) and agreed to.

MR. DEPUTY SPEAKER forthwith declared the main Question, as amended, to be agreed to.

Resolved,
That this House congratulates the Government for the progress that has already been made on reforming the welfare state to tackle social exclusion and welfare dependency; backs the Government's strategy of offering hope, opportunity and a better standard of living for people through its welfare to work programmes for lone parents, disabled people and those with long-standing illness, young unemployed people and the long-term unemployed, and the National Childcare Strategy, in contrast to the previous Government's approach of writing millions of people off to a life dependent on benefit; welcomes the Government's determination to ensure security in retirement for today's and tomorrow's pensioners through the pensions review and the action the Government has already taken to get help to Britain's pensioners, particularly the poorest pensioners, by cutting VAT on fuel and through the £20 winter fuel payment to pensioner households and the £50 winter fuel payment to pensioner households on Income Support; and congratulates the Government for keeping its promises and delivering its manifesto commitments to the British people.

Burdens on Business

Mr. Deputy Speaker (Mr. Michael J. Martin): I must inform the House that Madam Speaker has selected the amendment in the name of the Prime Minister.

Mr. John Redwood: I beg to move,
That this House regrets the damage to business and jobs represented by the actions and inactions of this Government; condemns the broken promises to the coal industry, the lack of clarity over ministerial duties, the persistent tax raids on business and the threats posed by new legislation; and urges the President of the Board of Trade to set out a clear energy, competition and business policy that is in the interests of British companies.
Labour is bad for business. So far, the Government have overtaxed and over-regulated business. They now threaten it with much damaging legislation. The Department of Trade and Industry, under the President of the Board of Trade, meddles, muddles and prevaricates on every issue. What a pleasure it is to see the right hon. Lady for once in her place. I have waited many a long week for the opportunity to debate, at last, something with her.
While the DTI meddles, the Treasury goes stealthily about its business, taking money away from the successful and the hard-working.
I love that work of fiction, the Labour party manifesto. I remind the House of what it said about taxations:
New Labour will establish a new trust on tax with the British people.
I am delighted that Labour used the words "new trust", because lots of trusts have been set up by Labour Members and Ministers. Some of them, we are told, do not avoid taxes. They are in Jersey and Guernsey for the sake of the sea air.
The manifesto continues—

Mr. Deputy Speaker: Order. I hope that the right hon. Gentleman will not stray from the motion before us.

Mr. Redwood: Perish the thought. I wish to talk about taxation as one of the principal burdens on business.
The Labour manifesto says:
The principles that will underpin our tax policy are clear: to encourage employment … to promote savings and investment".
It goes on to say that new Labour is not about high taxes.

Mr. Andrew Miller: While the right hon. Gentleman is referring to manifestos, I ask him to cast his mind back to his own manifesto when he ran for the Tory party leadership. The words "trade and industry" did not appear in his manifesto. Why should we take him seriously tonight?

Mr. Redwood: The hon. Gentleman should listen to my powerful case about the way in which the Government are letting down business. He might like to remember that, before I came to the House, I chaired an industrial company and was a director of a merchant bank. I had

substantial commercial and industrial interests in those days, which gave me considerable experience. When I became a Minister, I gave them all up.

Mr. David Hanson: I note that the right hon. Gentleman mentioned the tax policy in the Labour party manifesto. Does he agree with the Labour party's proposed cut in corporation tax? Will he vote against it?

Mr. Redwood: As I shall demonstrate, the Labour party is not proposing to reduce the corporation tax burden on companies in the next four years; it is proposing a swingeing increase in corporation tax during this Parliament. I am surprised that the hon. Gentleman has not done his homework on the Budget arithmetic, as he walked straight into that one in a rather unfortunate way. I suggest that he sends it back to the spin doctor for rewriting.
The glorious summer of Conservative economic success that Labour inherited is quickly being made winter by the Government. The business trees are bring stripped of their leaves and buds in the hurricane of measures coming before us. The Chancellor plunders and blunders on in the name of converging with high-unemployment continental Europe. The Government should listen. My hon. Friends know that this is true. The outgoing Conservative Government forecast total taxes this year of £282,100 million. Labour told us that there was no need to change Conservative tax and spending plans, apart from introducing the windfall tax. I am sure that Labour Members said that in debates that took place during the general election.
Last week, in the Budget forecast made by the Chancellor of the Exchequer, we were told that we would pay £10,100 million more this year in taxation than that set out in the Conservative plans. A massive back-door smash-and-grab raid has been carried out in just seven months, and much of the ensuing burden will fall on the business community.
Worse is to come. Next year, the country will be expected to pay £12,500 million more than it would have paid under the outgoing Conservative plans for that year. Over the next four years, business will be required to pay five years' worth of corporation tax. That is an increase of almost £2,000 million a year. Meanwhile, business will also be paying the pensions tax, the utilities tax, the telephone tax and the renewable energy tax while bracing itself for more taxes on the business motorist, on lorry transport, on sand and gravel extraction, on oil production and on much else besides.
At this point in the economic cycle, with a lot of money around and with job shortages in the most prosperous parts of the country, the Government should be encouraging savings and investment. Savings reduce the spending and inflation pressures on individuals, while investment would expand our capacity to make the goods that people want. After all, that was the promise included in the Labour party's manifesto.
Instead, the Government are penalising both savings and investment. Pension savings are taxed and tax-exempt special savings accounts and personal equity plans are to be abolished. Industrial businesses are to see their cash flows reduced by the avaricious Treasury, which will cut the moneys that they have available to spend on new equipment.
Meanwhile, there have been five interest rate rises from the party that said that it would keep interest rates as low as possible. The art of the possible is not a good one for the new Labour Government. It is no wonder that the interest rate rises were needed when the Chancellor of the Exchequer was so busy taxing savings. The right hon. Gentleman had to mop up the money in another way.
As a result, exporters face an uphill struggle. It is difficult exporting anything at current exchange rates. Industry is locked in a vice of higher interest rates and a higher value of sterling. It appears that the Minister of State, the hon. Member for Makerfield (Mr. McCartney), thinks that it is a good idea to yawn at this point. The hon. Gentleman should talk to British businesses, which are suffering as a result of the measures to which I have referred. He might learn a great deal if he talked to some real business men instead of being locked into his Department worrying about the next spin doctor attack.
Last Friday, I visited an exporter at Milton Keynes. He told me that, to stay in foreign markets, 70 per cent. of the components that he had to use were imported. Two years ago, 90 per cent. of his components were British.
I visited a textile plant recently. I was told that it was operating at half-capacity for want of overseas orders. The Government do not care and they do not know what to do. They merely press on with their high interest rates and a high-value sterling policy.
We have already read that United States investors may pull the plug on our electricity industry following the utilities tax and the regulatory threats that the President of the Board of Trade is making. Labour Members will learn that one company's grant is another company's tax increase and that taxing the successful is not the best way to produce growth in the economy and to increase employment.
Most businesses are suffering, but a favoured few do a little better from the Government. For example, BP has been granted a new 1,200 MW gas power station without any explanation. When did Labour drop its policy of saying, "No new gas power stations"? Rolls-Royce in Derby has been quickly granted £100 million of launch aid. I am delighted that the constituency of the President of the Board of Trade is to be looked after, but may we know what representations the right hon. Lady made and whether other companies will receive equal treatment?
Formula one, with 8,000 jobs at risk, is qualifying for help. It has policy reversed in its favour while the coal industry, with 50,000 jobs at risk, has policy changed against its interests. May we know what has happened to the six-point plan of the right hon. Member for Livingston (Mr. Cook)—when he was in opposition—to save the industry?

Mr. Gordon Prentice: My right hon. Friend the President of the Board of Trade did not take the decision to award Rolls-Royce not £100 million in launch aid, but £200 million. I have a Rolls-Royce plant in my constituency, and I know for a fact that my right hon. Friend had nothing to do with the decision to which the right hon. Gentleman referred.

Mr. Redwood: I did not allege that the right hon. Lady took the decision. I know that she would not do that.

I said that I wa nted to know what representations she would have made as a constituency Member, and whether other companies would receive the same treatment and opportunity as the company concerned. I welcome the success of that Derby business, but we in the House must ensure that things are fairly and properly done, and the Government have not been following fair and proper process in all too many cases.

Mr. Laurence Robertson: Does my right hon. Friend agree that the Government seem to be extremely sensitive on this issue? When I tabled a question to ask why the grant was given, the President of the Board of Trade replied that she had not been involved in the grant. That did not answer the question. Was not the right hon. Lady over-defensive before an allegation was even made?

Mr. Redwood: My hon. Friend is right. As Ministers are so secretive about all their doings, it is only natural that they become jumpy when we ask questions. If they were more open, they would avoid many more problems. The more secretive they are, the more suspicions build up and the more questions we shall table.
Those who want to know why we are worried about process could well study the question of formula one. We are told that the £1 million given by Mr. Ecclestone to Labour was unconnected with Mr. Ecclestone seeing the Prime Minister. We are told that that was not why the Prime Minister personally intervened to break a manifesto promise to save some jobs.
I contrast that position with that of the coal industry, which I think has not given £1 million to Labour. Its representatives have found it extremely difficult to see the Prime Minister. We now see Labour breaking its pre-election promises on better treatment for the coal industry and destroying jobs.
Perhaps the President of the Board of Trade would like to explain why two industries are treated in such a way. Let us have a system whereby anyone with a reasonable grievance may get to see the responsible Minister or Prime Minister, whoever may be dealing with the matter, without any suggestion of any impropriety occurring. We need a fair and open system. I had to intervene on the Minister without Portfolio in a television programme, to enable representatives of sports other than formula one to see the Prime Minister, who had not been able to see him on the formula one issue.
We are fortunate in having a Department of Trade and Industry memorandum in circulation, which speaks volumes about the Government's way of handling the coal industry issue and many others, which I am sure are the subject of similar memorandums. The memorandum does not tell us anything about what the President of the Board of Trade could do to save the coal industry. Instead, it tells us how the right hon. Lady could handle the presentation of the impending disaster under her policy.
The memorandum takes as given the depressing idea that the entire coal industry will be shut down within the next 10 years. It then goes on to propose how the media might be persuaded that that is a good idea. To do that would take more than an army of the finest spin consultants in the land. The Government will discover the painful way that there are some things that even spinning cannot make palatable.
The memorandum tells the President of the Board of Trade:
There is an expectation that deep mined coal will effectively end within ten years unless the government intervenes to protect it by changing its environmental and energy policies.
I look forward to hearing the right hon. Lady's remarks on that view of herself and her Department.
Instead of discussing how policies might be changed to help the industry, the memorandum then discusses how the existing bad policies can be presented to the public and press as inevitable. The idea is ventured that a low-profile reaction could work. It is proposed that the argument be left to the generators and mining companies. We are told:
We have also found these arguments on commercial negotiations between companies useful when declining bids for ministerial interviews, so preventing the 'we asked the minister to appear but he declined' statement.
That is not the only way in which Ministers have refused interviews or have refused to debate this and other subjects.

Mr. Geraint Davies: Is it not the case that under the previous Government, the coal industry was emasculated, decimated and destroyed? As Secretary of State for Wales, the right hon. Gentleman did nothing to defend Welsh jobs. Is it not a disgrace that he has the audacity to come to the House and to make such suggestions?

Mr. Redwood: That is another failure by the spin doctors; the hon. Gentleman should do his homework. He would then discover that I fought hard to allow the miners and the employees of the Tower colliery to buy their pit. I, like them, thought that they could make a success of it. I am pleased to say that, through their efforts, that is exactly what they did. I confess that I intervened in the Department of Trade and Industry to ensure that they had that opportunity, and I am proud of having done so. It is a lot more than the President of the Board of Trade has done for the industry since she has been in her post.
Fortunately, the newspapers are much wiser than the DTI gives them credit for being. They have seen that the Government have options and have some responsibility. It is a pity that the BBC played into the hands of the DTI's cynical media manipulation. It turned down the coal story for the "Today" programme when I first offered it last Monday. It then failed to ask the President of the Board of Trade a single question on this most important of issues when she was interviewed at an exhibition for the "The World at One" later in the week.
All that the President of the Board of Trade has managed to do while the coal controversy has raged is to go to a caravan exhibition and to mislead the public about my views. Instead of telling us what she would do for the coal industry—she has been as quiet as the grave on that—she claimed in the interview that I was hostile to caravans and the caravan industry. I insist today that she apologises to the House for misleading people in that way. There is no quotation, no comment and no shred of evidence to show that I am hostile to caravans and the caravan industry. I wish to put that firmly on the record.
There is, however, plenty of evidence to show that I think that the President of the Board of Trade has spent a little too much time in her caravan this summer; that was the point of

my criticism. I do not begrudge her a good holiday—I had one myself—but I think that she should have spent more time in her office sorting out the problems of business that the Government are creating and producing an energy policy with more chance of working.
From the wonderful memorandum, it is clear that the DTI strongly believed that, if it briefed a few journalists, they would write "what we say". If only. That breathtaking cynicism was compounded one page further on by the comment:
Since the government could be portrayed as driving the nails in the coal industry's coffin, these points deliberately do not highlight the government's environmental targets for Kyoto.
Of course they do not, because the famous hard choices that the Prime Minister has said we have to make have been ducked. The Government have not resolved the question whether it is more important to stop burning coal for environmental reasons or to encourage the burning of coal for energy policy and mining reasons. Today, the President of the Board of Trade must not be allowed out of the House without explaining how she will resolve that dilemma and without setting out an energy policy.
While the right hon. Lady is about it, will she now complete the review of electricity prices urgently? Does she know that the coal industry's case is that it can generate more power at a lower cost than the new gas stations if she comes to the right conclusion in her review? Why will she not tell us what her policy is on those new gas power stations? Is the BP station to be the only big one permitted, or will she license more from the 27 applications sitting on her desk? If so, how many more mines will have to close? When does she expect to stop importing electricity from France? Every extra megawatt imported means more British jobs lost.
The President of the Board of Trade has plenty of options. Instead of spending her days thinking about how to duck interviews and debates, she should start doing some real work on the issues facing the miners.

Mr. David Prior: Would my right hon. Friend be surprised to know that one of the largest users of electricity in this country cites one of the reasons for increases in the market price of electricity as being that generators are treating the windfall tax as a business cost and recovering it through their prices?

Mr. Redwood: My hon. Friend makes an extremely powerful point, and I am grateful to him. The windfall tax is, indeed, a cost that gets passed on, and it is another reason why the Government's energy policy is in such a mess.
The President of the Board of Trade also owes the House an explanation of why she misled us on more than one occasion concerning the shareholding of her ministerial colleagues. On 4 July, the right hon. Lady told us that the Minister for Trade and Competitiveness in Europe, Lord Simon, had undertaken not to trade his holdings in BP before January 1998. Subsequently, we were told that Lord Simon planned to sell them this summer. On 4 July, she told us—

Mr. Deputy Speaker: Order. Is the right hon. Gentleman saying that the President of the Board of Trade deliberately withheld information from the House?

Mr. Redwood: I am going on to make my case and to offer two possible explanations.

Mr. Deputy Speaker: The right hon. Gentleman must assure me that there is no suggestion that there was deliberate withholding of information by the right hon. Lady.

Mr. Redwood: I need your guidance, Mr. Deputy Speaker. I believe that the right hon. Lady answered questions wrongly. Either she did that because she was misinformed or she did it because she wished to mislead us—

Mr. Deputy Speaker: Order. The right hon. Gentleman must withdraw his remark. The right hon. Lady is not guilty of misleading the House, as far as I know. The right hon. Gentleman must not make that suggestion.

Mr. Redwood: I accept your guidance, Mr. Deputy Speaker. I thought, however, that I had asked a perfectly civil question. I think that the right hon. Lady owes us an explanation of why she told us certain things and we then discovered that something else happened. It is a convention of the House—

Mr. Hanson: On a point of order, Mr. Deputy Speaker. Can you tell the House what the shareholding of Lord Simon has to do with burdens on business?

Mr. Deputy Speaker: I cannot tell the hon. Gentleman that.

Mr. Redwood: If the hon. Member for Delyn (Mr. Hanson) checks the motion, he will see that it is widely enough couched to include the important matter of how Ministers take decisions and which decisions they are allowed to take. We have had great difficulty in finding out from the President of the Board of Trade and her right hon. and hon. Friends what they are and are not allowed to do. We should like some simple, straight answers to our questions.

Mr. Dale Campbell-Savours: What about the right hon. Gentleman's wife?

Mr. Redwood: I am happy to take on the hon. Gentleman. Does he want to intervene? He asked about my wife; I shall tell him. My wife works for British Airways. I told everyone that when I first entered a Department of State. I said that I wanted nothing to do with anything concerning British Airways because of that, although the rules at the time did not require that degree of caution. Wives and husbands were not mentioned in the rules at the time. I told people in advance; I am asking for the same courtesy from these Ministers.
Why cannot Ministers tell us in advance what their interests are and what they can and cannot do? Why are they so touchy and so secretive? Of course, people will be suspicious until the President of the Board of Trade stands at the Dispatch Box and tells us what Ministers can and cannot do and how they have protected themselves from any allegation of a conflict of interest. This is a serious matter, and the right hon. Lady should tell us now

why her answers did not work out as she thought they would and how she came either to be misinformed or to misinform the House.
The Government are no better at working out competition policy than at working out their energy policy. The President of the Board of Trade has proposed a radical change. Now that she is told of the problems of this policy, she is trying to wash her hands of it. The new Competition Bill will leave open the question whether the pub-brewer tie is legal or whether pubs will have to close. It will leave unanswered the question whether retail price maintenance is to go, damaging or closing many a community pharmacy. It leaves it unclear whether recommended prices for books and newspapers are acceptable. Many big and small businesses are faced with large legal bills as they check that out, and they are then faced with a couple of years or more of uncertainty. The President of the Board of Trade has decided, on reflection, not to answer, but to palm the problem off to her new quango, the Competition Authority. Labour is bad for business.
The Newspaper Society said:
The Society endorses the concern which has been widely expressed by the business community in general about the 'chilling effect' of the prohibition approach to competition law. The Article 86 prohibition will have the combined effect of deterring legitimate business activities.
In other words, the society thinks that it is very bad news. The Community Pharmacy Group said that the Competition Bill
poses a threat to the long term survival of community pharmacies".
Many hon. Members represent such pharmacies and want them to continue, not to be threatened by legislation.
The Brewers and Licensed Retailers Association said that if the beer tie is banned—and there is uncertainty about whether that is the intention—it
would close thousands of pubs and destroy tens of thousands of jobs".
Tonight, we need to know more about the Government's intention on company taxation and tax reliefs. The Chancellor stated clearly before he gained office:
A Labour Chancellor will not permit tax reliefs to millionaires in offshore tax havens.
We need to know the truth—my right hon. Friend the shadow Chancellor has tabled some questions today to get at the truth—of the Guernsey trust and how the Paymaster General will benefit from it. Why was it not declared earlier? Will the President of the Board of Trade tell us whether it is now Government policy to encourage Jersey and Guernsey trusts, or whether it is still their policy to take measures against them in a future Budget, to prevent people taking advantage of them?
We have no worries about people using Jersey and Guernsey trusts for sensible tax management, and we made no moves against those devices when in office. However, we do have worries about Ministers saying in their personal lives that such devices are fine, but signing up to the Chancellor's view in public that they are not. It is time that this humbug was sorted out and we should be told how the tension will be resolved.

Mr. John Wilkinson: Why have Ministers of the Crown and other right hon. and hon. Members routinely declared in the Register of Members'


Interests things such as pubs, woodland, farms and other things to which they have title, which they own or from which they benefit, yet the Paymaster General does not declare the Orion trust? I find that extraordinarily strange.

Mr. Redwood: It is a question that I hope the Government will be answering, because it is important to get at the seeming tension between some members of the Government's attitude in private and the stated public position, which does not seem to have been reversed so far, that Jersey and Guernsey trusts are not a good idea because of the tax losses that can, but do not always, occur to UK residents or UK companies.
The President of the Board of Trade still enjoys a blind trust arrangement, while all her Cabinet colleagues wound them up when they joined the Government—how wise they were. I see nothing wrong with a blind trust in principle for a Back Bencher or a political party, but it is difficult to see why a Minister should need one. The President has all the officials in the Department of Trade and Industry to give her advice on specific and general Government matters and she, like the rest of us, has a parliamentary allowance for her constituency affairs.
Has she read "Questions of Procedure for Ministers"? Does she agree that there are dangers for a Minister in a blind trust arrangement, when the Minister is in such a sensitive Department? I believe that her husband knows who the donors are; how can she be sure that she does not find out inadvertently who they are? Would it not be in her own interest and for her own protection for the trust to be wound up?

Mr. Deputy Speaker: Order.

Mr. Campbell-Savours: rose—

Mr. Deputy Speaker: Order. Let me speak, please; I do not speak that often. The right hon. Member for Wokingham (Mr. Redwood) seems to be getting into the realms of conflict of interest, which has nothing to do with the motion.

Mr. Campbell-Savours: You have just made a ruling, Mr. Deputy Speaker, and to the extent that the right hon. Member for Wokingham (Mr. Redwood) was able to make a statement, I think that I might be able to intervene and ask a question. A Mr. David Steene gave £20,000 to the leadership campaign of the Leader of the Opposition. Mr. David Steene was the managing director of a company called J and J Securities, which is a subsidiary of the City Mortgage Corporation, which—

Mr. Deputy Speaker: Order. The hon. Gentleman should know better. We are definitely straying from the motion and getting into personalities, which I do not want to do. We must return to the motion, and that goes for both sides of the House.

Mr. Redwood: I am grateful again for your advice, Mr. Deputy Speaker. The hon. Member for Workington (Mr. Campbell-Savours) does not seem to have accepted the distinction that I am making between the rules that apply to Ministers who are, rightly, subject to tighter rules than others and who are governed by "Questions of Procedure for Ministers" and its replacement, and the

rules that apply to others. We are interested in making sure that the rules are not only obeyed but seen to be obeyed. I do not know why Labour Members are so sensitive when we ask questions about that. Assuming that all is well, the Government have only to say so and all will be fine.
I am interested in the views of Henry Drucker, a senior Labour fund raiser in 1995, who has recently written of the relationship between business and Government. He said:
One has to wonder why people give to a blind trust when they could give—as Ecclestone did—to the party.

Mr. Campbell-Savours: On a point of order, Mr. Deputy Speaker. With respect, it is rather curious that I should be blocked for raising a matter that is relevant to competition policy and loan interest on mortgages charged by a London shark who gives to the Tory party, while the right hon. Gentleman is allowed to continue talking about something that has absolutely nothing to do with the debate in any way, shape or form. It seems to me that I am in order and he is out of order, yet—

Mr. Deputy Speaker: Order. I said that the hon. Gentleman was out of order; I also told the right hon. Gentleman that he was out of order and must return to the motion.

Mr. Redwood: I am very happy to do that. The hon. Gentleman seems unaware of the crucial difference between a Leader-elect of the Opposition and a Minister.
The President of the Board of Trade has one important new duty. She would perhaps say that it is to help British business, but I fear that it might not be—she sits on the "Abolish the Pound" committee with the Minister for Trade and Competitiveness in Europe. I wonder how easy it has been for the right hon. Lady to complete her U-turn on that important matter. In 1980, she said:
none of the arguments for staying in the EEC can be sustained.
Much more recently, in 1990, she described as pathetic the idea that we would lose all influence if we were outside the Common Market. Now she wishes to abolish the pound.
I hope that she will tonight explain to the business community why it should commit its moneys to this project when the Chancellor's manifesto for it is so flimsy, and how she has been able to show such flexibility of view in moving from outright hostility to the Common Market, let alone the single market and the single currency, to being in favour of it in principle and working closely with her colleagues on that committee, but rather secretively so far, to abolish this currency of ours. I hope that she will spare us some time over the next few months to debate the issue.
I am told that the right hon. Lady would welcome a public debate on whether we should abolish the pound, and I tonight offer my services to debate against her in any reasonable place and at any reasonable time. I am sure that any radio or television station would be interested, and I should be happy to join her. I look forward to her tabling a suitable motion. I make this offer because I have heard that she commented, in another context, that she would value such a debate, which is why I am sure she will find the time. Business might be better informed if she and I could have a sensible debate. She


could have the pleasure of setting out why she wishes to abolish the pound, and I could set out the reasons why at this stage, at this exchange rate and on current terms, it would be damaging to business.

Mr. Nicholas Winterton: On the euro and the single currency, does my right hon. Friend agree that, if we lose control of our currency, we lose control of our economy, and if we lose control of our economy, we lose control of our country? Bearing in mind the fact that our interests in the United Kingdom are not always those of the rest of Europe, would not we be surrendering any right or ability to influence policy in respect of the UK's interests?

Mr. Redwood: The principal objection that our party shares is that we cannot have a successful single currency until all economies are performing as if they were one. We Conservatives do not foresee such circumstances. My hon. Friend is right. All the time that the economies are not performing in line or as one, we need separate economic policies in order to steer them in the right direction, in the national interest.
I entirely agree with my hon. Friend that, given that our economy performed under Conservative management so much better than France and Germany's—a trend that is carrying on for a bit even under this Government, before their problems catch up with them—it would be very foolish to rush into a premature currency union. We would lose the right to set our own interest rates, we would lose the ability to influence our own exchange rate and we would lose all the other things that are necessary to secure the prosperity of the British people.

Mr. Miller: Like the exchange rate mechanism.

Mr. Redwood: I should have thought that the hon. Gentleman and his party would want to apologise for that. My party has apologised for it. The Labour party recommended the ERM, supported it, never criticised it and never said that we should come out of it. Will the Labour party now join us in apologising to the British people over that issue?

Mr. Miller: While we are on monetary union, was it the right hon. Gentleman who said in 1995 that monetary union would "break Europe asunder"? Is that still his view, and is it the united view of the Conservative party?

Mr. Redwood: I said that monetary union could break the economies of western Europe if people entered it on the wrong terms and the wrong basis. I still believe that that is true. Yes, my right hon. and hon. Friends agree with me. If we have a bungled monetary union, when the economies are not working together, which is what is on offer at the moment, it will be very damaging to economies entering it.

Mr. Gordon Prentice: Before the Minister leaves the point—

Mr. Redwood: "The Minister"—I am grateful. I give way.

Mr. Prentice: Is the right hon. Gentleman against the euro in principle? Is there a constitutional bar to joining

a single currency, or is he just being pragmatic? In year 10, if he were in a position to influence events, might he recommend that Britain ditched the pound?

Mr. Redwood: I am against, for this and the next Parliament, the substantial sacrifice of sovereignty that the single currency entails, because we do not see economic benefits flowing from it and the conditions are not right. We would not therefore recommend to the British people the sacrifice of sovereignty that it entails.

Mr. Prentice: indicated dissent

Mr. Redwood: The hon. Gentleman is disappointed because I have given a good answer, which he cannot exploit.
The DTI and the Department of the Environment, Transport and the Regions are locked in mortal battle for power and influence over regional policy. When the coal strategy went wrong, the Prime Minister called on the Minister for the Regions, Regeneration and Planning and the Minister for the Environment to find an answer. Where, I wonder, was the President of the Board of Trade and why was the Minister for Science, Energy and Industry, who is notably absent from this debate, overruled and given new bosses? When jobs were at risk in the motor industry, the Prime Minister and the Minister for Public Health decided to sort it out in their inimitable fashion.
There remains a row over who should control regional grants. The President of the Board of Trade is in dispute with her colleagues in Scotland and Wales over how to run grants to inward investors. We are being told both that she is in overall charge of the policy and that Wales and Scotland retain their freedom of manoeuvre. Both those propositions cannot be right. It is part of new Labour spin that we have one proposition on one day and a different one the next day, to keep the media interested. Meanwhile, as the row goes on, the United Kingdom is the loser. I predict that, over the next year, inward investment will decline as a result of the muddle that the Government are creating.
At the DTI, the season of mists has moved on to the winter of dark fogs. We cannot be told which Ministers are on duty over a holiday period or when Ministers are taking a break. Worse still, we cannot be told which specific issues which Ministers can and cannot handle. The British people elected this Government because some of them thought that they would be open and honest in their dealings and because the Labour party said that it had no need to raise taxes apart from the utilities tax. The British people have been sorely cheated. They have already been taxed an extra £10 billion.
As for openness, the long delay in telling us about a Minister's £2 million-worth of shares in BP was just the beginning. A BP gas station was given a licence ahead of 27 others, without proper explanation and against previous party policy. A grant of £200 million was given to Rolls-Royce in the constituency of the President of the Board of Trade, when scope for it in the budget was not clear. There was a U-turn on formula one without other sports with an interest being consulted. The Minister for


Competition and Consumer Affairs was taken off inquiries on Travel Trade, ICI and P and O because of shareholdings and prejudices that he revealed.

The Minister for Competition and Consumer Affairs (Mr. Nigel Griffiths): indicated dissent.

Mr. Redwood: If the hon. Gentleman would like to tell me why he was taken off those inquiries, I should be delighted to give him the Floor.
Despite the taxpayer paying for more than 500 political advisers at a cost of £2.6 million, the President of the Board of Trade is still operating a blind trust in order to give her more staff.

Mr. Ian Bruce: My right hon. Friend has been remiss in not mentioning the minimum wage. Last week, I went to hear a Minister tell lawyers about the minimum wage, only to find that a civil servant had been sent. Does not such Government unwillingness to get up in public occur all the time these days?

Mr. Redwood: My hon. Friend is right. I reassure him that my hon. Friend the Member for Sevenoaks (Mr. Fallon) will be referring to the minimum wage, so that we cover that vital issue as well.

Mr. John Bercow: Far be it from me to stop my right hon. Friend when he is in full and spectacular flow, but does he think that, in failing to secure general exemptions from the national minimum wage, the Minister without Portfolio has been utterly humiliated by the President of the Board of Trade, to the detriment of British industry and commerce?

Mr. Redwood: That seems to be the current position, but I warn my hon. Friend that the Minister without Portfolio has considerable guile. The President of the Board of Trade should watch out for a counter-attack. The hon. Gentleman has ways of influencing members of the Government.
Every one of the matters that I have mentioned has had to be dragged out of the Government. We have been misled, and there have been misrepresentations. We still do not know which Ministers handle which matters. The Government are as open as a locked safe, with the combination known to only a few who have privileged access. They make a mockery of democracy and the House. They prove that Labour is bad for business.

The President of the Board of Trade and Secretary of State for Trade and Industry (Mrs. Margaret Beckett): I beg to move, To leave out from "House" to the end of the Question, and to add instead thereof:
'welcomes the speedy action taken by Her Majesty's Government to foster an environment in which business can flourish, with macro-economic stability, low rates of corporation tax, a clear new competition policy, and a review of utility regulation; contrasts this with the boom and bust policies of the previous administration which led to the collapse of thousands of firms and unemployment for millions; and welcomes Her Majesty's Government's partnership with business to improve UK competitiveness.
The title of this debate—although one would not have thought so from the speech of the right hon. Member for Wokingham (Mr. Redwood)—is "Burdens on Business". Of course, the biggest of burden on British business was lifted on 1 May.
I congratulate the right hon. Member for Wokingham on his recent success in being named Front Bench questioner of the year—and against such stiff competition. I agree with the judges: I think that he is doing a magnificent job—for us, that is. He is not, of course, doing it quite unaided: the Conservative party's record in government is a big help. The reputation that it has cherished and built up over the decades—the claim to be the only party with which British business can work to advance Britain's interests—is vanishing before our very eyes. The right hon. Gentleman is making a unique and, from my point of view, hugely valuable contribution. It is not all due to his approach or his manners—although they help. It is the way in which he repudiates, even scorns, the experience and opinions of much of British business—and even of my predecessors in office from his own party.
The right hon. Member for Wokingham has repudiated the need for reform of competition law, which was so much common ground as to be uncontroversial before he came along and which has been widely demanded by British business. He has rejected as unnecessary and damaging the new approach to spectrum management, which was also previously uncontroversial, supported by the vast bulk of those consulted and included in the very manifesto on which he and others fought the general election.

Mr. Bercow: rose—

Mrs. Beckett: Does the hon. Gentleman wish to repudiate that policy?

Mr. Bercow: I am sure that the right hon. Lady, with her long experience in the House, recognises that it is her duty to answer questions rather than to ask them. She refers to the views of business and claims to respect those views. Will she therefore ensure that small businesses are exempted from the minimum wage out of deference to the judgment of the Federation of Small Businesses and the Forum of Private Business—yes or no?

Mrs. Beckett: No. We have made it clear from the beginning that the minimum wage will apply across British business, and that remains the case. I see that the hon. Gentleman has adopted from the right hon. Member for Wokingham the policy of asking questions to which the answers are already plain.
We have all noticed the visible yearning of the right hon. Member for Wokingham to see our relationship with our European partners based not on a mutual respect which is healthy, but on a knee-jerk opposition which is actively hostile.

Mr. Ian Bruce: Will the right hon. Lady give way on that point?

Mrs. Beckett: I shall come back to the subject, so I hope that the hon. Gentleman will forgive me if I make some progress.
The problem of the right hon. Member for Wokingham is that in almost every way he is living in the past. His behaviour towards my team—here and in the other place—has been spiteful as well as silly, but its underlying purpose seems to be to demonstrate, as the Conservative party repeatedly tried to do before the election, that


somehow Labour cannot govern and that Labour Front Benchers just cannot be Ministers. Forget it—it is too late, it is over; we are the Government, and most people still think that we are doing a better job.
The right hon. Member for Wokingham still rejects any action by the Government as automatically being a burden on business—even when business is calling for such action—just as his party did before the last election. He normally churns out the same stuff about the burdens of the social chapter or the minimum wage, but today he was so intent on personal unpleasantness that he forgot about them. He repeats one of the Conservatives' biggest mistakes—openly to put the interests of their party before the interests of their country.
For example, the right hon. Member for Wokingham put out a press release during the week of the motor show calling on me to announce forthwith the award of a substantial grant to Ford to build a new car here. The project was so much in its infancy that no decision of any kind had been made—not even an application by Ford to seek support. Lest we think the right hon. Gentleman merely incompetent rather than crassly irresponsible, he suggested that the grant should be higher because of the policies of this Government. Whose interests were served by such second guessing of negotiations and by such a raising of the stakes? Not Britain's.
In fact, the right hon. Member for Wokingham takes the tactic further. Just as he and his colleagues put party before country, so his behaviour and statements clearly put his own leadership bid before the interests of his party. His motto seems to be, "Never mind the quality, feel the width". So one day he condemns my hon Friend the Minister for Science, Energy and Industry for pursuing the interests of industry to the detriment of those of the environment. The next day the right hon. Gentleman condemns my hon Friend for putting the interests of the environment ahead of those of industry.
The right hon. Member for Wokingham is a kind of political catherine wheel, frantically hurling off sparks in all directions. It is fast, it is noisy and it contributes nothing but a little light entertainment.

Mr. Nigel Griffiths: And we are going to ban them.

Mrs. Beckett: I thank my hon. Friend for that helpful sedentary intervention.

Mr. Redwood: Comparing me to a catherine wheel is the nicest thing that the right hon. Lady has said about me all day. However, she has missed the point of my press releases. The point is simple: there is a possible conflict between environmental imperatives and the needs of British industry. I have not told her how the balance should be struck, but I am asking her again today to tell the nation how it will be struck. The specific issue is whether more coal or more gas power stations will be used regularly. That is a good test of whether the Government are greener or more industrial.

Mrs. Beckett: I shall come to the issue of energy policy in a few moments. If the right hon. Gentleman feels then that I have not answered his question adequately, he may return to it. I do not disagree with absolutely

every word in the Opposition motion. It urges a clear energy, competition and business policy, which I agree that we need. Such a policy certainly was not part of our inheritance from the previous Government. Baroness Thatcher, the former Prime Minister, told us that manufacturing did not matter.

Mr. Bercow: Rubbish.

Mrs. Beckett: That is not rubbish and I have heard many Conservative Members regret the former Prime Minister's statement, including one whom I will not name but he knows who he is. Under the right hon. Member for Henley (Mr. Heseltine), we were supposed to get intervention before breakfast, tea and dinner. Under my predecessor, we never knew what to expect and we do not know now. Such a clear policy was not apparently in the Conservative manifesto, because the right hon. Member for Wokingham says that it was not much good. We can agree on that. A clear policy apparently does not involve more competitive markets—the right hon. Gentleman opposes change—and it certainly does not involve the United Kingdom being at the heart of Europe.
The motion accuses me—as the right hon. Gentleman repeatedly does—of inaction. On what basis? First, he cited the delay in announcing a decision on the P and O merger. It might have suited him to have an earlier announcement, without co-operation from and agreement with the European Union as the other regulatory authority, but it would not have been in the interests of the company or of the work force. In fact, Lord Sterling, the company chairman, said that the decision was "worth waiting for".
Today, the right hon. Member for Wokingham calls my work on the issue "sloppy", because I did not cap freight prices. However, the Monopolies and Mergers Commission found no competition issues in freight, so I could not have acted unless I stopped the whole merger. Is that what the right hon. Gentleman wants? He is always bragging about his experience as a competition Minister at the Department of Trade and Industry, so why did he not know that I could not act? Is he sloppy, or just incompetent?
The right hon. Member for Wokingham attacked me for doing nothing to prepare industry for the millennium bug, when in fact we continued the programme that we inherited from his Government. As it happens, we were already planning to step up that programme and announced the move forward to Action 2000, chaired by Don Cruickshank, as soon as we were able to publish that information. Last week, my right hon. Friend the Prime Minister set up a Cabinet committee, which I shall chair, to pursue the issue.

Mr. Ian Bruce: We all acknowledge the difficulties of tackling the millennium bug in the time available, but will the right hon. Lady acknowledge that the Government have slipped on the targets that were set for the civil service? Why has she appointed Don Cruickshank to that post when the Government ignored him when he wrote to them about the Wireless Telegraphy Bill and said that it should protect the consumer?

Mrs. Beckett: That has nothing to do with Action 2000. It is an interesting point and the hon. Gentleman will no doubt pursue it in Committee, but it has no relevance to the point that I was making.
The right hon. Member for Wokingham complains constantly—he did so again tonight—about my parliamentary record. He attacked me for not speaking in the debate on the Wireless Telegraphy Bill, but it is commonplace for other Ministers to handle more minor legislation without a Cabinet colleague. The hon. Member for Solihull (Mr. Taylor), the former Minister for Competition and Consumer Affairs, did so last year, and the right hon. Member for Wokingham did so himself as a Minister of State.
The right hon. Member for Wokingham keeps saying, somewhat stridently, that he has had the chance to question me only three times in four months and has had no opportunity to debate. Diddums! It is called being in opposition. Did the right hon. Gentleman not notice when in government that parliamentary questions happen only once a month? The rules have not been changed to penalise him. Incidentally, a shorter time has elapsed between the two most recent Trade and Industry Question Times in this Parliament than in a similar period in 1992. As for debates, between May and November this year there were no general industry debates in Government time, as the right hon. Gentleman rightly said—nor were there in the same period in May to November 1992.
The right hon. Gentleman has sought to make much of my unavoidable absence at our recent Question Time, claiming that I went to Australia to avoid his questioning. I did enjoy it. As he knows perfectly well, because I gave him advance notice, I went in fulfilment of an engagement made by my Conservative predecessor to promote British business—the culmination of a year's worth of activity—to open jointly with the Premier of Victoria the biggest trade fair that Britain has ever staged in Australia. More than 400 United Kingdom companies competed to take part and 90 did so, many of them small and medium-sized enterprises. No one regrets more than I the unforeseen clash with my duties in this House, which I have never neglected, but to suggest that I should let all those companies down smacks more of the right hon. Gentleman's conceit than of common sense. Incidentally, that visit was one of three major overseas visits that I have undertaken since May.
The right hon. Gentleman also alleges that I do not answer questions and letters. Up to the end of July, he had asked 46 questions about the personal finances, behaviour and duties of Ministers, compared with 28 about the entire area of science, industrial, and energy policy. Up to today, he has just about managed to even the score. Yet all those questions and his extensive correspondence—six letters about the personal finances of my noble Friend Lord Simon, eight letters about the financial consequences of personal tragedy in the family of my hon. Friend the Minister for Competition and Consumer Affairs—have been answered, albeit not to his satisfaction.
You know the feeling, Mr. Deputy Speaker. Sooner or later, every hon. Member has one of those correspondents who writes or telephones every second or third day. They always say you have not answered their questions, no matter how hard you try. They always say that they are going to take it up with higher authority or they take it to the press. We all get them. You just do not expect it to be the shadow Secretary of State.
Most recently, the right hon. Gentleman accused me of inaction about coal. The Conservative party's only energy policy was to close half Britain's coalfields and leave the

other half to wither on the vine, having removed all the levers of Government policy. The Conservatives left the coal industry freewheeling downhill like a car without brakes or steering and now they stand at the side of the road shouting to us to stop the runaway vehicle. We found an energy playing field massively tilted against coal and in seven short months we have levelled that playing field, tilted by the Conservative Government over more than seven years.
Inaction and broken promises were the hallmark of the Administration we replaced. Nearly 10 years were spent discussing the reform of competition law. They even got as far as a draft Bill, which we would not have opposed, but they just never got around to doing it. Some may applaud and some oppose my decisions on merger policy, but no one but the right hon. Gentleman has ever suggested that they are not clear. In fact, a recent article in The Daily Telegraph said:
competition she said, and competition she meant".
The Opposition prepared the legislation on spectrum pricing, but they never found time for that, either. Users and industry believe almost universally that our proposals, far from being a burden on business, will make for sensible spectrum management.
In the two years during which I shadowed this Department, no major piece of legislation came to this House. This Government have overseen the introduction of eight bills in seven months, including the Wireless Telegraphy Bill, the Competition Bill and the Fossil Fuel Levy Bill. We are also backing four private Members' Bills—the Employment Rights (Dispute Resolution) Bill, the Fireworks Bill, the Public Interest Disclosure Bill and the Weights and Measures (Beer and Cider) Bill—and we have just published the National Minimum Wage Bill. We have published a report from the business and Government export forum and we have already taken the steps called for by exporters to recast trade support policy.
We are undertaking consultation on a fair payments Bill at the request of small businesses and in the new year we shall be publishing a White Paper on fairness at work and a Green Paper for consultation on utility regulation.
We are preparing proposals to give the Post Office commercial freedom and we are working in partnership with business under the umbrella of Competitiveness UK to prepare a White Paper on competitiveness next year.
We are forcing the pace on getting issues of competitiveness and employability on to the agenda of the European Union and again seeking to ensure the participation of and a voice for business representatives from across the EU.

Mr.Oliver Letwin: The right hon. Lady mentioned that the Government are preparing a paper on the Post Office. Can she tell the House what her hon. Friend the Minister of State failed to tell the Select Committee on Trade and Industry recently—whether the Post Office will have the capacity, as a normal company would, to give its stockholders dividends rather than being subject to a negative external financing limit?

Mrs. Beckett: My hon. Friend the Minister of State tells me that he was not asked that, but in any case I can assure the hon. Gentleman that we shall be happy to discuss those issues with him at length when our proposals for the Post Office are published.
Moreover, all that activity—not inactivity—has its underlying themes. Strong markets, modern companies, looking to the future—those are the themes that bind all the activities of my Department to the pursuit of competitiveness, and against which we shall measure the worth and relevance of our activities.
First, on strong markets, I am absolutely clear that a strong competition policy is fundamental to competitiveness. That is why one of this Government's earliest actions was to find parliamentary time for a Competition Bill, which will replace an outdated regime with a modern, effective system. A competition law that creates a more transparent and consistent regime will be a big improvement on the slow-moving and ineffective structures that we have today and will benefit all firms, large and small. Our review of regulation for the utilities is driven by the same desire to see more transparency and consistency in regulation.
The second pillar is modern companies. Only modern companies can address modern challenges. We need modern companies succeeding in new markets with new products—companies that innovate and compete on our strengths in design, science and ideas. It is not a sustainable strategy to compete on price alone. In the increasingly global marketplace, firms need to compete on quality in all its dimensions.
Our third theme is the need to look to the future. What we as the Government do today will make a real difference to the industries and citizens of the future. It is clear that we must embrace the industries of the future and, in particular, we must deal with the specific needs of smaller firms—hence our proposals to enhance the work of business links and drive them, too, towards higher quality: hence our decision to take forward the work of the foresight groups.
Outside my own Department, the Government as a whole are attacking those issues on which business has sought action for so long—and under our predecessors sought in vain—such as the pursuit of economic and policy stability and of policies to set the right framework for the long term, an attack on skill shortages and on the neglect of infrastructure, and action to tackle tax avoidance, to simplify and to cut corporation tax and to offer temporary capital allowances to small business. Those are just a few among the 10 tax cuts that this Government have made.[Interruption.] No doubt the hon. Member for Aldershot (Mr. Howarth) is about to welcome them.

Mr. Gerald Howarth: No, I am not. I am rising to invite the President of the Board of Trade to tell us a little more about the foresight action programme. She said that the Government are taking the matter forward, but she made no proposal regarding the grave concern of the Society of British Aerospace Companies that the investment under past Conservative Governments, which has led to the £5 billion of inward income into this country arising out of exports, will dry up because Government investment is not being made available. What is the right hon. Lady doing on the foresight action programme in regard to the aerospace industry?

Mrs. Beckett: That does not arise from the foresight action programme. The Government have not yet made any announcement on proposals from the aerospace industry.

Mr. Redwood: I enjoyed the right hon. Lady's point about correspondence. I have a little advice for her: if she does not want so many letters, all that she has to do is to answer a few questions—then we shall not need to ask so many. I have a question now. The right hon. Lady has tried to present the case that the Government are cutting taxes on business. The Conservative forecast is that the measures announced so far will cost British business £25 billion extra over the lifetime of this Parliament. Does the right hon. Lady agree? What impact will that have on jobs, investment and new ideas?

Mrs. Beckett: I have not had a chance to study the precise figure cited by the right hon. Gentleman, but if it were true it would be the first time ever. I have had long experience of shadowing the Treasury team: previous figures promulgated by the Conservative party were never accurate and I see no reason to suppose that they ever will be.
We have made 10 tax cuts, none of which the Conservative party has either recognised or welcomed. We may take some steps about which the business community may have reservations—all Governments do—but we shall always listen and strive to ease those concerns if we can.
Before the general election, our extensive consultation revealed a business desire for economic and policy stability, for investment in skills and infrastructure, for a constructive attitude to Europe, and for a partnership in which Government and business each play their separate but complementary role to advance the interests of our country. That is what business wants from Government, and all the right hon. Gentleman's sound and fury cannot disguise the fact that that is what they are getting.
In government, the Conservative party displayed to the full their arrogance, incompetence and dishonesty. In opposition, they seem to have learnt nothing and forgotten nothing. That is what put them where they are today and that is what will keep them there.

Mr. Deputy Speaker (Mr. Michael Lord): I call Mr. David Ruffley.

Mr. David Ruffley: I had not stood up, Mr. Deputy Speaker.

Mr. Deputy Speaker: As the hon. Gentleman is not prepared, I call Mr. John Bercow.

Mr. John Bercow: Thank you, Mr. Deputy Speaker, for calling me when I was not expecting it.
I richly enjoyed the invective of the President of the Board of Trade, but in all candour it was downmarket drivel. I very much hope that, after due practice and several rehearsals, she will be capable of producing something better for the consumption of the House.


She slavishly adhered to a prepared text and gave not the slightest indication that she had seen or read it in advance, let alone written a word of it.
I want to focus on what I shall call the triple torture of British industry and commerce, but first I shall give way to my hon. Friend the Member for South Dorset (Mr. Bruce), as he seems extremely eager to intervene.

Mr. Ian Bruce: My hon. Friend listens to speeches much more attentively than I do, but I thought that we heard a list of what business wanted. Did not the Secretary of State say that a high pound was one of the complaints of business? Or has she not been listening to business at all?

Mr. Bercow: There was not the slightest evidence that she had listened to the representations of business on the subject. The most curious feature of her oration was when she listed with glowing pride a series of measures that she and the Government had introduced. She did that to justify the claim that she was working for British business. If she had been so courteous as to take my intervention, I would have asked her whether she thinks that size of Government and quantity of legislation are equivalent to quality of administration.
What makes the President of the Board of Trade think that having many laws, issuing many guidelines and making many speeches about commercial and industrial policy is what small or large business wants? It wants a climate in which it can thrive and prosper, but the Department is delivering no such thing.
I want to focus on the triple torture of British industry and commerce: the minimum wage; the European employment chapter, to which the Government have naively signed up; and the strikers' charter. I shall deal, as lain Macleod would have said, briefly but with relish, with each of the three.
First, I want to deal with the national minimum wage. I use the word national advisedly. The Government published the Bill last Thursday, and the glimmer of hope that had existed in the House and among the business community—that good sense might have prevailed over dogma—was extinguished.
We all know about the deep and alarming split within the Government. The President of the Board of Trade—a left-wing firebrand and adherent of old-fashioned socialist ideology, steeped in the religion of bashing business—wanted a national minimum wage with no exemptions by region, by sector, or for small companies. The Minister without Portfolio took a different view. Far be it from me to accuse him of having objections based on principle. The word principle has not yet featured in his lexicon. He objected simply because good sense had occurred to him.
The Minister without Portfolio recognised that, without widespread exemptions, an horrific toll of unemployment would result. No doubt he had observed that in his region—the north-east—on the basis of a 50 per cent. restoration of differentials, a national minimum wage would eliminate 78,316 jobs. No doubt he charitably pointed out to the President of the Board of Trade that, on the same basis, in her region—the east midlands—88,037 jobs would be lost.
The Minister without Portfolio sought, in kindly fashion, to steer the President of the Board of Trade away from the path of madness to a course of sanity.

She rebuffed and spurned him and neglected his entreaties, choosing instead to proceed with the outstandingly foolish policy of a national minimum wage.
In her brief, scripted speech, the President of the Board of Trade appeared unconscious of her self-contradiction. She told us with great pride that the Government listened to business. Immediately, and entirely logically, I inquired whether she recognised the views of small business organisations on the national minimum wage and would defer to their wish for general exemptions for small companies. With equal pride, she immediately said no. The great listener to business ignores business's views if they happen in any way to diverge from her stated intention and the dogma that informs it.
The national minimum wage will be a calamity. I do not expect the President of the Board of Trade to accept that from me or from my right hon. Friend the shadow President of the Board of Trade, and I understand that she is sore and writhing from the wounds inflicted by my right hon. Friend—although I urge her to respond with marginally greater grace in future—but I challenge her to accept it from other sources, including the Confederation of British Industry.

Mr. Frank Doran: Is the hon. Gentleman aware that yesterday Stan Mendham of the Federation of Small Businesses said that the FSB now accepted the principle of the minimum wage and was anxious to work with the Government? He has not mentioned that.

Mr. Bercow: I am interested to hear that. I have had discussions with the Federation of Small Businesses and its position remains absolutely clear: it is against a national minimum wage, but now that it is to be introduced it will seek to minimise its impact. That is simply good business sense. The federation would rather that the minimum wage had never come on the agenda in the first place.
The CBI reckons that a national minimum wage could cost British business £4.5 billion, the Institute of Directors has dismissed it as a crazy notion and the Employment Policy Institute, no less, a left-of-centre organisation, condemned the policy, saying that small firms would come under severe pressure to survive if the plan went ahead unamended. That is the reality of the matter—as distinct from the distorted interpretation of the hon. Member for Aberdeen, Central (Mr. Doran).

Mrs. Teresa Gorman: Is it not the case that small firms are not universally payers of low wages and the ladder upon which very many unskilled and young people get their first opportunity of a job? It is those groups, which the Labour party makes such a fuss about helping, that will be damaged by the minimum wage policy.

Mr. Bercow: My hon. Friend is entirely correct. The President of the Board of Trade is proposing to kick the ladder away from those who might have had the chance to get their feet upon its first rungs. That is disgraceful. It is an exploitation of her position in favour of the strong and to the detriment of the weak. She is culpable and she will be held responsible in due course.
It is regrettable that the head of the Low Pay Commission, Professor George Bain, has said that he believes that jobs will be lost, but wonders whether it is


rather a good thing that those jobs will be lost. It is all very well for him, in his ivory tower, unconcerned by the impact on him—for there will be none—to say that other people's jobs can safely be destroyed; he will not bear the burden and he will not pick up the bill.
In May 1996, under the previous Government, the Department of Trade and Industry published an estimate of 1 million job losses on the strength of the half restoration of differentials. Curiously, the President of the Board of Trade has been struck down by silence. Very rarely is she reticent—on this occasion she has been. The Department of Trade and Industry has had since 1 May to issue its own prognosis of the effect of a national minimum wage, but it has studiously avoided doing so. If the right hon. Lady disagrees with our prediction, we would be fascinated to hear hers.
The truth is that a national minimum wage will not create jobs, but destroy them. It will not improve competitiveness, but erode it. It will not strengthen our economy, but weaken it. Why do not the Government say what they think the effect will be upon jobs? Is it again a case of, "Can't say, won't say"? Of one fact we are certain; British industry and commerce will have to pay for the ideological folly of this Administration.

Mr. David Borrow: Is the hon. Gentleman aware that, at its most recent conference, the Federation of Small Businesses voted in favour of a sensibly negotiated minimum wage? Is the hon. Gentleman also aware, as I am from speaking to small businesses, that many would welcome a minimum wage because that would stop their being undercut by rogue firms that seek to pay poverty wages? Those small firms want to employ well-trained work forces and pay them a decent wage.

Mr. Bercow: I am sorry to say that the hon. Gentleman would not secure a post as a researcher in this place because his research is deficient. The simple fact is that the Federation of Small Businesses is opposed to a statutory minimum wage. If the hon. Gentleman is not aware of that important fact, frankly it is high time that he became so.
I should like to move on from the subject of the national minimum wage about which one can tell that Labour Members are deeply embarrassed—witness the departure from the Chamber of the Minister of State. [Interruption.] I am happy to see that he has returned.
I should like now to focus on the subject of the European employment chapter. Under that chapter, we shall move in the direction of a common European employment policy. We are now told under that chapter that it is a matter of common concern which employment policies member states in the European Union pursue. It is said that they must respect that fact in the formulation of policies.
Qualified majority voting will lead to the production of guidelines for employment policies to be pursued by member states. In case the President of the Board of Trade is in any doubt about the potency of that arrangement, she ought to be aware that we are told that those guidelines shall direct employment policy. Note the use of the word "shall", not "might", "could", "would" or

"should". The great and the good, the motley collection of the European Parliament, the Economic and Monetary Affairs and Industrial Policy Committee, the Committee of the Regions and the Employment and Social Affairs Committee will favour us with their wisdom on the policies to be pursued throughout the Community.
If the right hon. Lady is so naive as to suppose that for ever and a day those will be entirely matters of voluntary persuasion by the European Union, frankly she needs to think again. She must recognise that over the years the tendency of the Community has been to pursue policies initially by an attempt at persuasion and, ultimately, by a resort to coercion. That is the track record. If the President of the Board of Trade thinks that different principles will apply in this case, she ought to explain what they are and why the situation will not be a re-run of past disasters and betrayals.

Mr. Wilkinson: My hon. Friend is making a cogent case about the dangers of the employment chapter to which the Government have signed up by virtue of the Amsterdam treaty. Would he care to turn his attention even wider, to the question of structural funds? Is it not the case that far from securing influence in the councils of the European Union, Her Majesty's Government are likely to lose grade 1 status for the highlands and islands of Scotland and for Northern Ireland as recipients of structural funds? Furthermore, while we are being disadvantaged, more and more British taxpayers' money is being dispersed to other parts of the European Union. In other words, their employment is being aided whereas ours is being gravely disadvantaged.

Mr. Bercow: My hon. Friend is entirely correct. What is more, that trend will be exacerbated if the policies of this Administration are pursued. If we go into a single European currency and if, as a consequence of so doing, unemployment in parts of Europe increases, so will our contribution to the cohesion funds. We will not be the beneficiaries of those increased payments. Transfer payments to other member states in the European Union will be enormous, and the British taxpayer will pick up the bill.

Dr. Alan Whitehead: Could the hon. Gentleman possibly remind us who signed the Single European Act and what consequences it had for the British economy? Were there any provisions in it for the regulation of employment in Europe?

Mr. Bercow: Unfortunately the hon. Gentleman is getting rather confused about different treaties. He is entirely correct that the Conservative Administration signed the Single European Act. Its principal provisions, as I would have hoped the hon. Gentleman is conscious, were to do with completion of the single market. For that purpose, we accepted some qualified majority voting. The employment chapter to which I am referring is a feature of the treaty of Amsterdam. If the hon. Gentleman is able to propel his mind forward 11 years, that would greatly aid our debate.

Dr. Whitehead: rose—

Mr. Bercow: I shall not give way to the hon. Gentleman again, for the simple reason that I know that other hon. Members wish to speak in the debate, and I am about to make my final point about the strikers' charter.
There is a pernicious provision that the Government are about to set in train of which the country should be aware and which all right-minded people should condemn: the provision for the recognition of trade unions. What is intended by the Government will be deeply damaging to British business. They say in their proposals that 50 per cent. of the relevant work force, although that is not defined, will suffice for the recognition of trade unions and their entitlement to be granted the status of official bargaining agents on behalf of the work force. That can spread like a contagion right across British industry and commerce.
I do not suggest that it is the intention to return to the dark days of the winter of discontent of the late 1970s, but that could be the outcome. We could return to those grim days, when the streets went unswept, the sick went untended and the dead went unburied. [Interruption.] It is all very well for uninformed right hon. and hon. Members on the Labour Benches to sneer. Their responsibility is to provide a foolproof guarantee that that will not be the outcome of the legislation that the President of the Board of Trade is to introduce to the House. Unless and until they are able to provide that categorical assurance, a policy of silence, not sneering, would be more appropriate.

Mr. Borrow: Will the hon. Gentleman give way?

Mr. Bercow: I shall not give way as I am coming to a conclusion—I am sure the hon. Gentleman will be greatly reassured by that.
What the Government have in mind is greater trade union power—power that did not exist even in the days when Michael Foot was Employment Secretary. As a result, we are faced with an enormous threat of industrial unrest. If that is what the Government intend, they should admit it; if they do not wish it, they have a responsibility to take steps to avert it.
I shall now observe a self-denying ordinance as I am anxious to hear my hon. Friends' speeches. I am also waiting to learn whether one Labour Member can provide half an answer to some of the questions posed by my right hon. Friend the Member for Wokingham (Mr. Redwood) in his opening speech.

Mr. George Stevenson: This is an extremely important debate. Anyone who has listened to the Opposition contributions, especially to that of the right hon. Member for Wokingham (Mr. Redwood), will have been left with the clear impression that the Conservatives are seeking to rerun the past. Listening to their contributions so far, it is difficult to avoid the conclusion that the only arguments that they have advanced are the stale, old ones that we heard during the election campaign, which the Conservatives lost.
The Conservatives lost the election for many reasons, but one of them was because business lost confidence in them owing to the actions that they took during their 18 years in power. Unless the contributions from Conservative Members improve during the rest of the debate, I do not expect that they will regain that confidence.
It was a pity that of the 45 minutes or so that the right hon. Member for Wokingham spoke, 30 minutes was spent on a personal diatribe. We heard such earth-shattering revelations as the fact that he was worried about

why my right hon. Friend the President of the Board of Trade had not agreed to support the Ford motor company, when that company had not even asked for any such support. The other earth-shattering revelation that seemed, for 30 minutes, to form the basis of the right hon. Gentleman's speech involved him wondering why my right hon. Friend the President of the Board of Trade had spent some of her holiday in her caravan. The businesses in my constituency are not worried about that and I suspect that they will not be impressed by what we have heard from the Conservative Benches.
If the arguments advanced in this debate were about Government policy, how relevant that was and how it would affect business, that would be perfectly legitimate; it would be right and proper. But a reference to Europe had to be dragged out of the right hon. Member for Wokingham by one of his hon. Friends mentioning the exchange rate mechanism. In view of that, Labour Members are entitled to be suspicious about why, in a speech of 45 minutes, the right hon. Gentleman never mentioned the biggest burden imposed on industry in 1992, when the previous Government's policy ignominiously and incompetently collapsed.
We may argue about the effect of that collapse on industry and I am prepared to debate that legitimate point. But if we are talking about Government credibility, is it not strange that the right hon. Gentleman, speaking on behalf of Conservative Members, never mentioned the total and fundamental collapse of his Government's policy in 1992? What are we to read into that? Is he ashamed of it? The party has apologised for joining the ERM, but is he ashamed of it? He never mentioned the subject, which had to be dragged out of him by one of his hon. Friends.

Mr. Howard Flight: May I suggest to you that, rather than being a huge problem, it was the greatest boon to industry when the United Kingdom left the ERM?

Mr. Stevenson: So, what you are saying is that another ignominious collapse of Government policy is good for British policy. Is that what you are arguing?

Mr. Deputy Speaker: Order. Both hon. Members are referring to me. I am not responsible for these matters.

Mr. Stevenson: I apologise to you, Mr. Deputy Speaker, but it is interventions of that nature that mean that we sometimes slip up over parliamentary protocol—

Mr. Deputy Speaker: Order. May I make a general point to the House? The conventions exist precisely so that we do not lose our tempers and get carried away.

Mr. Stevenson: I am extremely grateful, Mr. Deputy Speaker.
The ignominious policy of the previous Government, which we now seem to be being urged to repeat—we shall not—came after two of the worst recessions that this country has ever witnessed.
There was no reference in the speech of the right hon. Member for Wokingham to the other burden on business inflicted by 18 years of the previous Government's rule: their complete and utter isolation in Europe. Time after time, businesses in my constituency asked me why the


then Government did not put forward what they wanted to hear in a positive fashion and why the Government were, instead, left completely isolated. Business representatives asked me, "Don't the Government know that they are not working in our interests, but against them?" That argument fell on stony ground with the previous Government. For 18 years that massive burden was imposed on industry.
I accept that the previous Government did not have a policy of imposing burdens on the coal industry; their policy was to destroy it. They did not need to put unnecessary burdens on the coal industry because they wanted to see it destroyed; they certainly achieved that very effectively in my constituency. Future generations in this country will scarcely believe that any Government could have embarked on such a policy.
Another important area of business involves small and medium businesses. My experience—and I suspect that it is shared by many Members of the House—is that small and medium businesses have given a clear message. They are worried about the business rate that was imposed by the previous Government. In my constituency it went up 30 per cent. in less than three years. Businesses are worried about late payment, about investment and about a chronic lack of skills, which I think was referred to by the hon. Member for Billericay (Mrs. Gorman). They are also worried about the burden of regulation. I shall briefly refer to each of those issues.
The uniform business rate was imposed by the previous Government because they were not prepared, in any way, shape or form, to trust local authorities. They thought that Whitehall knew best the consequences that have been suffered by businesses in my area and elsewhere.

Mrs. Gorman: Is the hon. Gentleman not aware that the reason the previous Government introduced the uniform business rate was that Labour councils all over the country were doubling or trebling business rates year by year and using them as a milch cow to fund the introduction of their extravagant general policies?

Mr. Stevenson: I am prepared to debate that point with the hon. Lady at any time she chooses, but I would say now that her general comment would not stand up to scrutiny. What she describes was certainly not the case in my local authority area—I have had the figures checked. Increases in business rates have far outstripped increases in general rates.

Mr. Borrow: Does my hon. Friend agree that, had the previous Tory Government not neglected the quinquennial revaluation of business properties, the disparity between different regions of the United Kingdom would not have grown to the extent that, in 1990, many of the points raised about high business rates became true? It was the Conservative Government's failure to address the problem through revaluation and the fact that comments made by the right hon. Member for Henley (Mr. Heseltine) stopped the revaluation in 1979 that created many of the problems.

Mr. Stevenson: My hon. Friend is obviously correct, and I am grateful for that intervention.
Late payment is another burden on businesses. They say that they are not getting paid quick enough and that something needs to be done about the problem. Why did

the previous Government do nothing? If they were so interested in lifting the burdens on businesses, especially small businesses, why did they ignore the problem for 18 years?

Mr. Andrew Lansley: The hon. Gentleman asks a question and I may be able to provide an answer. I was at the Association of British Chambers of Commerce at the time and I well recall that, in 1988, the then Secretary of State for Employment conducted a consultation on statutory interest on late payments. Industry, for which I spoke, said that it did not want it, just as industry is now saying that it is the wrong way to proceed.

Mr. Stevenson: That is more a comment on the effectiveness of the previous Government's consultation processes than a statement of the truth of the matter. All hon. Members, with the possible exception of the hon. Member for South Cambridgeshire (Mr. Lansley), would accept without much equivocation that late payment is a real problem for small businesses. Why did the previous Government not act? Why did they ignore the problem throughout their period in office? The Labour Government will act to lift that burden from small businesses.
Skills are extremely important to businesses, especially small businesses. It would be useful for Conservative Members to look at the 1995 report from the European Union Court of Auditors. It makes interesting reading: it contains an entire section on training programmes for small and medium businesses and one section refers particularly the previous Government. Why did the court refer to the previous Government? The report states clearly that less than 1 per cent. of the programmes available to support training for small and medium businesses in the United Kingdom had been implemented by the previous Government—less than 1 per cent. The hon. Member for South Cambridgeshire is an expert on research, but some of us Labour Members have done our research as well, and the figures are damning.
European Union objective 4 funding relates to submissions for retraining those who need new skills to re-enter the job market. That is an essential activity, but in 1995–96 there was not a single bid from the previous Government—not one. When I questioned that in European Standing Committee B, I was told by the Conservative Minister that there was no need for such retraining programmes—a staggering reply. When we talk about burdens on business we should consider the previous Government's record—lamentable, not by accident but by design. The Conservative Government did not believe in public intervention in training and retraining and certainly did not believe that such intervention should come from the European Union.
Deregulation is fine in respect of burdensome regulations that are unnecessary, out of date or counterproductive. There is general consensus that we want to see such regulations out of the way, so we support the Select Committee on Deregulation that was set up by the right hon. Member for Henley in 1994. However, there are two problems with that Committee: first, although it abolished between 800 and 900 regulations, between 1994 and the time they left office the previous Government introduced 10,000 regulations. That cannot have fulfilled the objectives of the exercise. It is no good Conservative


Members shaking their heads—it is true; the figures derive from answers to parliamentary questions. Secondly, as I understand it, the Committee does not contain representatives from small and medium businesses—what a lamentable omission from such an important activity.
Conservative contributions to the debate have tried to rerun the stale, lost arguments that were put forward during the general election. We have heard nothing positive from the Conservatives, whereas the Labour agenda is about skills, investment, economic stability, sustainable growth and a Government who, in complete contrast to the Conservatives, are determined to work in partnership with business.

Mr. David Chidgey: I came to the debate with feelings of curiosity and disbelief. I was curious because Conservative Members did not take the opportunity to apologise to the House for the damage that their policies caused to business and jobs when they were in office; and I experienced a sense of disbelief when I saw that they had failed to recognise the verdict of the voters who, having suffered the consequences of their policies, threw them out of office and inflicted the heaviest defeat on the Conservative party since 1906. What does it take before they get the message? What we heard instead was 45 minutes of auto-rant, which is hardly entertaining and certainly not interesting.
Just look at the record left us by the Tory party. In the 1990s under the Tories the national debt more than doubled. It took 300 years to accumulate a national debt of £160 billion. It took the Tories five years to more than double it, to £350 billion. Under the Tories, public sector debt per income taxpayer rose from less than £7,000 to more than £13,000. An independent report by Coopers and Lybrand, a well respected firm, stated that high borrowing and the rundown of state assets had left the public sector technically bankrupt. In 1989, the public sector had a net worth of £243 billion; by 1995, the Tories had reduced it to £36 billion. If they had stayed in office, it would now be zero.
Despite selling off public assets and screwing down public investment, the Tories failed to reduce public-sector borrowing. Let us look at their record on taxation: 22 tax rises since 1992, the biggest ever peacetime increase. The Library has calculated that the average family would need a cut in income tax of over 6p in the pound just to get back to where they were in 1992 at the time of the general election.
Of course, the Tory average family is not average at all. The definition of a family used in Conservative statistics is a family with two children under the age of 11, a male earner on full-time average wages and a non-working wife. That applies to fewer than 2 per cent. of all families. What about all the rest?
Under the Conservatives, the poorest became worse off than ever, and the gap between rich and poor widened. Consider the record on unemployment. The Conservative motion this evening mentions damage to jobs, but unemployment under the Tories rose from 1.26 million in 1979 to more than 2 million in the last Parliament. Consider, too, the damage Conservative policies have done to business and industry. In the year before the Tories left office, investment in manufacturing was lower

in real terms than in 1970, a quarter of a century before. Investment in the UK was the fourth lowest in the EU as a percentage of GDP. When they left office, inflation was the third highest in the EU, and short-term interest rates were the second highest—only Greece's were higher.
So on public debt, taxation, poverty and unemployment, investment, inflation and interest rates the Tories' record is one of failure. No wonder the right hon. Member for Wokingham (Mr. Redwood) adopted the slogan, "No change, no chance". No wonder, either, that the public took his sound advice and voted his party out of office.
Only now do we hear the hint of an apology—not in the House but in an interview reported in the Sunday Times this weekend. I am pleased to see the hon. Member for Chesham and Amersham (Mrs. Gillan) in her place; I do not like to speak ill of the absent. She reportedly told the Federation of Small Businesses:
Mea culpa, we did not get it right in all areas".
That prompts the question—how many areas were there left to get it wrong in? Admitting that the Conservative Government did not respond to the needs of small firms, she went on to say:
We did not listen but perhaps we did not always receive the right message".
The killer point came next:
There will be little policy coming from the Conservative Party in these initial stages, as is understandable, because we got it wrong.
I am still waiting to hear a formal apology—

Mrs. Gorman: The hon. Gentleman paints an appalling picture of the alleged state in which we left the economy. What does he make of the fact that 40 per cent. of all Japanese investment overseas is placed in Britain; that German motor car manufacturers have moved here because of our better labour relations and stable currency; and that even the French are moving their high-tech industries across the channel—

Mr. Chidgey: Yes, I have got the message. I had always thought the hon. Lady was a Eurosceptic, yet now she seems to welcome the benefits of our membership of the EU. She might care to ponder why United Kingdom finance is never seen to be invested in this country—it is always being invested elsewhere.
Given the damning Conservative record of destruction to businesses and jobs, the lack of a policy from the party of the hon. Member for Chesham and Amersham will not be missed, in the House or anywhere else. Now we have an opportunity to repair the damage and reverse the broken promises—

Mr. Bercow: Will the hon. Gentleman give way?

Mr. Chidgey: I think the hon. Gentleman has already entertained the House enough for one night with a lengthy speech and several interventions. I am sure that other hon. Members would welcome the chance to make short speeches in the little time that is left.
There is certainly an urgent need to lighten the load on business and to shift taxation away from employment. We need to simplify bureaucracy and encourage the growth of small to medium firms by promoting competition.
As the hon. Member for Stoke-on-Trent, South (Mr. Stevenson) said, there is an urgent need to tackle the growing skills shortage. If we do not do so, there will be


inflationary pressure on wages and the drives for greater efficiency and for greater productivity will be held back. The skills shortage can be tackled only by investment in education and training.
Above all, there is an urgent need to provide proper support for business, to prepare it for the conversion of information technology for the year 2000.
I shall now discuss taxation. We need to simplify taxation by standardising employers' national insurance contributions. We need to consider switching taxes from employment to the consumption of finite resources of fossil fuels. I urge the Government to examine again the idea of raising the threshold for VAT for small and medium enterprises.
The Liberal Democrats welcome the long-overdue Competition Bill. It is time to tackle the anti-competitive practices that are still rife in the economy. We should look again at the recent mergers of international accountants, reducing competition by decreasing their number from seven major firms to five, and the apparently planned merger of two of the major clearing banks, which will reduce competition by decreasing their number from five to three.

Mr. Lansley: I understand the hon. Gentleman to be suggesting that there should be a large-scale energy tax—[Interruption.]

Mr. Chidgey: There is so much coughing from the Front Bench that I cannot hear.

Mr. Lansley: The hon. Gentleman seems to be suggesting a large-scale energy tax. How would such an energy tax be implemented without undermining the competitiveness of many industries for which energy is an important input cost?

Mr. Chidgey: I take the point. I have tried not to go into too much detail because I appreciate that time is short. We believe that tax should be switched from the good things—employment—to the things that consume our finite energy resources. The latter form of tax is commonly called the carbon tax. The whole thrust of that taxation policy is that it is a neutral tax. When national insurance contributions are cut, taxation is switched from employment to the use of finite energy resources. [Interruption.] If the hon. Gentleman will excuse me, I must press on, because otherwise we shall not hear the valuable contribution from the hon. Member for Sevenoaks (Mr. Fallon) later.
This week, it was reported that electricians had ignored the recommendations of their union and rejected a 30 per cent. increase over three years, because there is an incredible shortage of skilled technicians in the construction industry, which provides a bargaining tool. We must overcome the skills shortage if we are not to create wage instability.
Employers in my constituency tell me that they are worried, not about the minimum wage, but about the shortage of skilled labour. Key workers are being poached by rivals offering higher wages, fuelling the wages spiral, increasing costs and reducing competitiveness. That is a legacy of decades of under-investment in education and

training. It is time to stop the rot. We cannot meet this country's skills needs unless we broaden the base of those entering higher education and training.
The increase in student numbers can come only from the families who, for too long, have been excluded from higher education and vocational training. The Government are sending out the wrong message by introducing tuition fees for students. Already there are signs that university applications for the next academic year are dropping dramatically.
It is time to break down the barriers of training for those seeking to improve their skills and for those whose low skills have led to long-term unemployment. Welfare to work can become a reality only if it does not deny access to quality skills training because the individual is deemed to be no longer available for work. We must break the treadmill that means that a person cannot sign up for decent skills training because, if they do so, they lose their unemployment benefit because they are not available for work. The aim must be for that person to gain the skills that will get them out of unemployment and into decent work, which will enable them to contribute to society by earning wages and by paying income tax.
All—not just some—young people should have the right to education and vocational training. If we are to bridge the skills gap, if we are to turn the country round by creating a highly skilled work force that adds value to our economy, we cannot ignore the seedcorn of our young people. That is why the Liberal Democrats are committed to everyone under the age of 18 having the right to two days a week education or quality vocational training.
I want finally to discuss the millennium bug. It is now crystal clear that, as the millennium approaches, solving the problem of the computer time bomb will be expensive and will cause severe disruption to many firms. A survey of more than 1,000 firms about to be published by PA Consultants shows that 50 per cent. do not even have a millennium programme in place. About half the manpower that industry and commerce will need to deal with the problem will have to come from specialist consultants—but there are not enough information technology consultants to go around. At the very least, firms face a huge hike in the cost of IT support. Small firms face a disaster; even the largest face huge problems.
It is estimated that companies representing one third of our gross domestic product will not complete the conversion on time, so 29 per cent. of our GDP is at risk. The Government must start to take the problem seriously. Smooth words from spin doctors are not enough while the head of Action 2000 can afford to spend only one day a week at his desk.
While it is clear that the Opposition motion serves only to highlight their lamentable performance in Government and to confirm how thoroughly they deserved to be thrown out of office, the new Government have yet to convince us that they are taking the actions and pursuing the policies that are vital to this country's recovery. They have been given a mandate based on promise and expectation; the country has the right to demand that they deliver.

Mr. Geraint Davies: I want to respond to the right hon. Member for Wokingham—Mr. Deadwood, as he is known—

Mr. Deputy Speaker: Order.

Mr. Davies: I am sorry that the right hon. Gentleman—

Mr. Deputy Speaker: Order. The hon. Gentleman must sit down. Will he please refer to hon. Members in the correct way?

Mr. Davies: I want to respond to the right hon. Member for Wokingham (Mr. Redwood). I will not make any jokes about him, other than to say that he seemed to think of himself as old king coal, Arthur's friend. After 18 years of Conservative rule under which the coal industry was destroyed, it was a bit rich to hear the shadow Minister standing on his hind legs talking as though he was the champion of coal. He suddenly asserted that gas was more expensive than coal—a basic insight which, apparently, he did not have when he was a Minister in the previous Government.
The right hon. Gentleman spent half his time making various smears about Ministers, responding to the simple fact that his wife worked for British Airways when he was a Minister at the Department of Trade and Industry and British Airways was doing all sorts of things. However, those are not the issues in the debate.
The debate is about the simple fact that the economic legacy of the previous Administration is an appalling mess. We are falling down the skills league. We inherited £410 billion of debt, escalating at an enormous rate and costing us almost £30 billion a year in interest charges. Interest rates and inflation rates went through the hurly burly of boom and bust, hitting 16, 17 and 18 per cent. We had multi-million unemployment, more repossessions than during the highland clearances and two recessions that stripped the heart out of manufacturing. At the same time, small businesses went bust at an unprecedented rate. The legacy was one of hopelessness.
It was a great victory for Britain when the new Labour Government were elected. If the shambles of the Conservative party were running Britain, what sort of future would we have? We would have a myopic approach to a new Europe—a Canute-type Conservatism in which the Opposition dismiss the prospect of monetary union, which is inevitable.
The right hon. Member for Wokingham asked us to join him in apologising to Britain's people for the farce over the exchange rate mechanism. We will not join the Opposition in any apology for the despicable mess that was their legacy.
The official Opposition profess the economics of isolationism, of little England and of chip shop England in an emergent Europe. That is not the future for this country. The Opposition cannot even decide among themselves. The views of the old and new Opposition Front-Bench team diverge massively on the convergence criteria. Contrast that—because that is what the motion is about—with the new Labour Government, who heralded a new era of macro-stability with that bold and courageous move by the Chancellor of the Exchequer.

Mr. Lansley: In the light of the hon. Gentleman's remarks, how does he explain the Government's own

figures, which suggest that growth of 3.5per cent. in 1997 is to be turned into growth of about 2.5 per cent. next year and 1.75 per cent. the year after? It is hardly a new era.

Mr. Davies: We have been in government for only seven months and already we are seeing the first blossoms of economic success, with employment growing. The single move by the Chancellor to delegate responsibility for setting interest rates to the Bank of England reduced overnight the cost of borrowing on gilts by 0.29 per cent. In the first year, that will save the taxpayer £50 million and, as those bonds mature, the saving will be about £750 million per year to the taxpayer. That is just one move.

Mr. Tim Loughton: Will the hon. Gentleman give way?

Mr. Davies: I will give way later.
We have the lowest corporation tax in Europe: the second major reduction was announced last week. It is good for business and for Britain.

Several hon. Members: rose—

Mr. Davies: I am provoking a lot of Conservative Members now. I have to take one intervention.

Mr. Letwin: Is the hon. Gentleman aware of the cash flow effects of the Government's change in corporation tax? Does he deny the analysis that the change will cost the whole of British industry about £2 billion?

Mr. Davies: As always, the Government have the long-term interest of business in mind. I am of course aware of the position in relation to cash flow management in the next few years, but, in sharp contrast with the previous Government, we are looking towards the long term.
We have embarked on the new deal, funded by a one-off levy. Business likes that. In Croydon, a major economic engine for south London, we are already persuading the business community to take on the idea of the new deal, which gives new people new opportunities for new business success. Much play was made by the hon. Member for Buckingham (Mr. Bercow) about small business.

Mr. Campbell-Savours: Who is Buckingham?

Mr. Davies: It is that chap over there. My hon. Friend probably does not know him. He is not very famous.
Small business can take on the long-term unemployed at a reduction of £75 a week for the over-25s, or £60 a week for the under-25s. That is a major reduction in labour costs. It enables small business to make one-off, critical mass growth, and a breakthrough in terms of size and prosperity. That is why the proposal has been welcomed so widely.
The advent of regional development agencies is cherished by the business community. Only the other evening, I was having dinner with senior members of the Confederation of British Industry in London. [HON. MEMBERS: "Oh."] I know that Conservative Members were not invited, but that is a sign of the times. Those CBI


representatives welcomed the new, planned, coherent approach to economic development on a regional basis, and the Labour party's initiatives.

Mr. Philip Hammond: Did the hon. Gentleman have an opportunity, during that dinner with senior members of the CBI, to discuss their outright opposition to the minimum wage?

Mr. Davies: No, I did not. We were too busy talking about the need for British business to prepare for economic and monetary union, which the Conservatives completely overlooked. It was pointed out to me at that dinner that having the old Tories still in power, arguing among themselves, would have been a hopeless catastrophe for businesses trying to prepare for the emerging Europe. The minimum wage did not feature in the discussions, partly because it is not a serious issue for the main players in the CBI. The idea of the minimum wage is to encourage skilling, added value and productivity. In a modern economy, our ambition is not to become the new China.
Moving on to more serious points than those raised by the hon. Member for Runnymede and Weybridge (Mr. Hammond), the new Labour Government have inherited an economy characterised by millions of people on the dole, unable to pay tax, and the rest paying higher taxes simply to keep people on the dole.
Now there is a new opportunities culture. We are giving thousands and thousands of people a new opportunity to add value to the economy, to contribute and to become stakeholders. That new deal, that welfare to work, that investment in macro-economic stability, with help for small and medium-sized enterprises and all economic stakeholders in a planned and strategic way marks the rebirth of a new Britain for a new millennium. The name of the game is partnership. We are the friend of business, and prosperity is on the way.

Mr. David Ruffley: The motion refers to action and inaction on the part of Ministers. My hon. Friend the Member for Buckingham (Mr. Bercow) gave a distinguished explanation of the Government's damaging actions on wider union powers, a statutory minimum wage and the social chapter. I should like to draw attention to the inaction of Ministers on the important subject of business rates.
I am disappointed that the Minister for Small Firms, Trade and Industry is not here, because she was very vocal before and during the election campaign in her alleged support for small business. Not a week went by at any of the main London business forums without a visit from her, talking about how she would reduce the burden on small businesses. She spent a lot of time talking a great game. That has been proved to be full of hollow words.
Let us examine the pledge on business rates that the Labour party has broken. We all know why business rates are important. They comprise a large proportion of the turnover and profit of many small businesses in my part of Suffolk as elsewhere. That is why the Labour manifesto said:
we will make no change to the present system…without full consultation with business.

A press release on 25 July said that Labour would take a look at Government finance and business rates,
consulting with business fully about returning the business rate to local control.
I have news for Labour Members. Local chambers of trade in my part of East Anglia have not had one piece of paper from the Government on the reform of business rates and how the burden of business rates may be reduced. You have said that you would consult, but you have patently failed to do so. In failing to consult, Labour has broken yet another pledge.
Let us examine the burden that local businesses face. It is clear that small businesses face a disproportionate burden as a result of business rates. The Government have said that they will do something about it, but are failing to do so. The Conservatives had a concrete proposal to give businesses a tax-free allowance for the first £1,000 of rateable value. That was in our manifesto. We had concrete proposals that the Government have not even attempted to follow. You have not consulted when you said that you would.

Mr. Deputy Speaker: Order. It ought to be possible for hon. Members to remember for a little while what I said.

Mr. Ruffley: The Government have singularly failed to live up to their manifesto pledges since 1 May.
Many small businesses in my part of Suffolk are particularly concerned about the Government's commitment to remove the universal council tax cap in due course. Their manifesto says absolutely nothing about a capping mechanism in respect of business rates.
In the absence of any details on that important subject from any Ministers in any Department, particularly the Minister for Small Firms, Trade and Industry, there is a great deal of speculation, which is worrying the small business community, particularly in the provinces. In particular, it is worried about the gossip and the spin that is being applied by Government advisers to the effect that the local business rate, if returned to council control, would be linked to domestic council tax levels.
That is what Ministers' advisers are putting around. That is not a great comfort to local businesses, because they know that, if local businesses are tied to local council tax levels, there is only one way in which business rates can go—up. A report, which I am sure is right, shows that an increase of up to 10 per cent. in domestic council tax is winging its way to council tax payers in the next financial year.

Mr. Borrow: Does the hon. Gentleman accept that many businesses foresee a return to a closer relationship and partnership with local government, but would welcome a link between a local business rate and the council tax, so that any increase for council tax payers is matched by the increase for business rate payers rather than divorcing one from the other, as that would risk local government increasing the council tax by a different percentage from that applied to the business rate? Or is he saying that a central, nationalised business rate should remain?

Mr. Ruffley: I wish that such erudition on the subject of local government finance was shown by Government


Front Benchers. They say nothing on this subject, which is precisely why local business men complain to me about an absence of consultation and understanding.
The whole basis on which local council tax business rate setting is returned to local authorities, and the linking of it to the domestic council tax, will inevitably shift the gearing downwards. As we all know, at present a 5 per cent. increase in council tax will have an upward impact of only 1 per cent. on local authority budgets. At the moment, that provides a disincentive for local politicians to jack up rates. The change that the Government propose would reduce the gearing, making it very much more attractive to raise local finance—not just the domestic council tax, but local business rate tax. That is what the Government's manifesto proposals mean.

Mr. Loughton: I was entirely confused by what the hon. Member for South Ribble (Mr. Borrow) said. He missed one fundamental point. One reason why businesses would not, perhaps, welcome a return to the link with local rates is that business men do not get a vote. Businesses have no power or authority over local authorities, whereas local voters do. That is the fundamental difference.

Mr. Ruffley: I thank my hon. Friend for that valuable and important contribution.
The logic of the Government's proposals is bad for business. The inaction of Ministers and Departments is a disgrace. They have made promises and failed to keep them. The Government's inaction is something which local businesses will not take lightly.

Mr. Geraint Davies: Will the hon. Gentleman give way?

Mr. Ruffley: As I am bringing my remarks to an end, I shall not give way.
The motion goes to the core of Ministers' inaction, which is damaging jobs and business and leading especially to uncertainty in the small business sector.

Mr. Michael Fallon: We have had a useful debate. What a contrast is to be drawn between the contributions of my hon. Friends and those of the two Labour Members. My hon. Friend the Member for Buckingham (Mr. Bercow), in an eloquent speech, highlighted the fallacy of the case for the minimum wage. My hon. Friend the Member for Bury St. Edmunds (Mr. Ruffley) reminded the Government of their complete inactivity on the business rate.
The contributions of Labour Members reflected old Labour in all its manifestations. We heard from the hon. Members for Stoke-on-Trent, South (Mr. Stevenson) and for Croydon, Central (Mr. Davies).
In seven lean months, the Government's business policy has become clear. There are favours for their friends—for example, special treatment for formula one and a huge new gas-fired power plant for BP while for the rest there are higher taxes. There is more regulation for everyone. In business, the Government are partisan, expensive and burdensome. I shall focus especially on the burdens that are being imposed by the Government.
Before I refer to the burdens, what has happened to deregulation? The Conservative Government produced about 30 deregulation orders a year. I checked, and in the past seven months the Labour Government have produced only one such order. They have made it easier to deduct trade union subscriptions from employees' pay without written authorisation.
What has happened to the deregulation task force? The answer is that it has been renamed. It is now the better regulation task force. Even so, it seems to have sunk without trace in the Cabinet Office bureaucracy. It has become the Humphrey of Government quangos. We have not heard from it and we have seen no proposals from it. That gives the lie to the Labour party's promises before the general election that it would continue with the process of deregulation.
New burdens are being imposed. British business faces a wave of new legislation. There will be an increase in rules, bureaucracy and costs on a scale not seen since the mid-1970s. The President of the Board of Trade boasted about the weight of legislation that she would inflict on business. The right hon. Lady took responsibility for 10 Bills this evening, including the Wireless Telegraphy Bill, the Fossil Fuel Levy Bill and a Competition Bill, proposing draconian new powers of search and entry and retrospective fines of up to 10 per cent. turnover. These proposals have been opposed in detail by all major employers' operations.
There is the National Minimum Wage Bill, which will increase the cost of labour for not only low-paying businesses but all businesses. That is why employers' organisations such as the Engineering Employers Federation oppose it. That is not because member companies pay badly but because of the impact that the Bill will have on differential pay rates. The Bill will interfere with the freedom of employers to reward performance and skills. It will also price younger people out of jobs.

Mr. Russell Brown: Will the hon. Gentleman give way?

Mr. Fallon: I shall not give way, because there is very little time.
A week ago, the Prime Minister prayed in aid the minimum wage in the United States of America. In the USA, however, small firms are exempted. Firms with a turnover of less than $500,000 are exempted. Seasonal workers are exempted. A catalogue of other workers are also exempted. After the National Minimum Wage Bill, there will be further legislation on compulsory union recognition, on the right to statutory interests and on strikers' rights, as my hon. Friend the Member for Buckingham reminded us.
The biggest and heaviest burden of all comes in the form of the social chapter. It is proposed that we should have European works councils which are expensive, bureaucratic and unnecessary. They are welcomed by one trade union leader, who said:
It is tempting to see European works councils as a threat to trade union organisation. But that would be a recipe for inactivity. Our objective should be to do what the German trade unions do and take over these works councils in multinational companies.
That was Mr. Dromey just two years ago.
That directive is followed by the parental leave directive. The Department of Trade and Industry estimates the cost of the directive at £200 million a year for British business. That is a burden on business. There is also the part-time and temporary workers directive which gives new statutory and contractual rights to part-time workers. There is the sex discrimination and—

Mr. Ian Bruce: On a point of order, Madam Speaker. I am sorry to disturb the peroration by my hon. Friend the Member for Sevenoaks (Mr. Fallon). Have you been informed, Madam Speaker, that the President of the Board of Trade will not be here? My hon. Friend is presenting a damning indictment of the right hon. Lady's speech, yet she is not here to hear it; nor is—

Madam Speaker: Order. The Government have collective responsibility. The Minister of State is present on the Front Bench waiting to respond.

Mr. Fallon: Further measures are proposed on sex discrimination and sexual harassment which not only run directly counter to the principle of United Kingdom civil law that people bringing a claim must prove their case, but flatly contradict Labour's Sex Discrimination Act 1975.

Mr. Stevenson: Will the hon. Gentleman give way?

Mr. Fallon: No, because I do not have time.
Another proposal is for national works councils. Firms with as few as 50 employees will now face the same statutory obligations as the multinationals because proposals introduced under the social chapter will be subject to qualified majority voting. We read that, when the idea was first mooted last June, Downing street said:
We are not in favour of new regulation in this area.
By November, we read that the Prime Minister
has been urging European Union leaders to refrain from using the social chapter to pass new laws that could intlict more red tape on business.
That is what happens if one gives away vetoes. This country ends up begging its fellow European leaders not to legislate against it.
We put that point to the Prime Minister at Question Time, but he did not answer it. Happily, the question was then put to the President of the Board of Trade, not in the House, but by Mr. John Humphrys in "On The Record" on Sunday 9 November. He pushed the right hon. Lady on the point that if she wanted exemptions for small firms from the national works council directive, she would not be able to secure them. Mr. Humphrys said:
You will resist but you can't actually stop it happening.
The right hon. Lady answered with what may be a summary of her industrial policy. She said:
Well, er, we shall see how things go.
The Government do not have an answer.
The Government do, however, pay attention to some industries. As my right hon. Friend the Member for Wokingham (Mr. Redwood) explained, formula one gets attention. The Prime Minister and his children attend Silverstone, Bernie puts in a million and somehow, there is immediate access to Ministers.There are fewer jobs in

formula one than there are in the coalfields, but the miners have not yet been to No. 10. The miners' leaders have not yet been to see the Minister for Science, Energy and Industry, but they have been to see us. The reason is that Ministers have broken their promises on preventing gas-fired generation.
Ministers are happy to preside over the disintegration of the coal industry—indeed, they have accelerated closures with the additional money they have taken out of the power industry. They have £250 million from National Power, £200 million from PowerGen and £100 million from Eastern Electricity, precisely the companies which are negotiating with the coalfields and precisely the companies which are buying coal from our collieries. Coal is not in safe hands.
Where has the President of the Board of Trade been over the past few weeks? We read that coal policy is now in the hands of the Deputy Prime Minister, a Minister with responsibility for the environment, a Minister with responsibility for the regions or the Minister without Portfolio—everywhere except in the hands of the President of the Board of Trade. She does not have a coal policy, but we know where she was last week. She was opening the caravan show at Earl's Court. Caravans are quite a metaphor for this Government—they are slow moving, they sway from side to side and they block the way ahead.
What about the Minister for Science, Energy and Industry, who is the Minister with responsibility for coal? Where was he last week when all the meetings were taking place in Downing street? He has not even attended this debate. I can tell my hon. Friends that we tracked him down last week. The headlines read, "Battle Acts to Stop Bad Hair Days". He was promising not help for the coalfields but
a government-funded study of problems with products used in hairdressing".
He said that his proposals
represent a genuine package of positive steps that will help to engender confidence in this important sector of the economy".
He is the Minister for blow waves.
I have to tell Ministers that we have rumbled their business policy—it is formula one, it is caravans, it is hairdressing. We have been raising the issues that matter to British business—competition policy, costs, the minimum wage and the new wave of 10 Bills of which the President of the Board of Trade boasts and which will impose new costs right across the British business sector.
The Labour party claimed to favour stability when it consulted business before the election, but it now boasts about introducing 10 new Bills, thus creating a wave of uncertainty and instability right across industry. The Government claim to have cut business taxes; instead, they have increased them in every sector. By introducing the windfall tax and increasing corporation tax and taxes on the technology industries, they have increased the burden on British business.
Finally, and most outrageous of all, the Government claim, laughably, to be business's friend, but their policies have already been rejected in detail by business. The national minimum wage is opposed by employers' organisations, the windfall tax has been opposed, and the proposals for statutory recognition have been opposed. It is nonsense to say that Labour supports British business. In the past seven months, it has done everything possible to undermine the inheritance that we bequeathed them.

The Minister of State, Department of Trade and Industry (Mr. Ian McCartney): The hon. Member for Sevenoaks (Mr. Fallon) has been out of politics for five years, and his speech showed it. He is the same old Tory with the same old story. He has nothing new to say, so he simply attacks. He attacks the right of home workers to be paid 50p an hour. He supports the principle and concept of low pay, but opposes the right of workers whose children fall ill to take time off to visit them in hospital. He opposes the right of 2 million low-paid workers to have paid holidays for the first time in their life. He is opposed to employers and employees sitting down in works councils to discuss matters of interest and agreement—despite the fact that, when the Tory Government opted out, employers opted in.
What else does the hon. Member for Sevenoaks oppose? He opposes fairness at work and the right of individuals to be treated fairly by their employers. He is still opposed to people being protected from being forced to work 60, 70 or 80 hours a week, despite the fact that, in government, the Tories lost a European Court decision, which said that they were acting illegally in preventing people from being protected from working unsocial hours. That is the sum total of what the Tories have learnt—or not—since 2 May.
What about the hon. Member for Buckingham (Mr. Bercow), the mouthpiece of Jonathan Aitken? He learned his trade—no more, no less—supporting or promoting Jonathan Aitken. He spent 45 minutes in the House denying other hon. Members the opportunity to speak positively on how we need to take the United Kingdom economy forward. When it came down to it, the hon. Gentleman had only one simple thing to say: he believes in poverty pay. His simple premise is no pay or low pay. At the end of 45 minutes of diatribe, he showed himself for all he is: a person who defends the few against the many in the workplace who have been undermined by low pay for the past 30 years.

Mr. Ian Bruce: Will the hon. Gentleman give way?

Mr. McCartney: Sit down.
What an apologist the hon. Member for Bury St. Edmunds (Mr. Ruffley) is for a Tory Government who, for 18 years, hammered small business rates. He came to the debate to attack a Labour Government, despite that—

Mr.Bruce: rose—

Mr. McCartney: Wait a minute.
All that the hon. Member for Bury St. Edmunds had to do was to apologise for 18 years of Tory government, during which the Conservatives undermined small businesses.
Only yesterday, in The Sunday Times, the hon. Member for Chesham and Amersham (Mrs. Gillan) apologised—or attempted to—for how the Tories treated small businesses during 18 years of government. It is too late to apologise. Tens of thousands of businesses have gone out of business, and gone with them are valuable jobs in local communities. The hon. Lady said that the Government have done nothing for business and taxation. We have been in power for about 220 days. The Tories were in

power for 18 years—during which there were 22 tax rises, two recessions and 3 million people unemployed. That was their record.
What have we done in the first seven months? We abolished advance corporation tax, reduced VAT on fuel and power from 8 percent. to 5 per cent., reduced VAT for approved insulation schemes, cut corporation tax from 33 percent. to 30 percent., cut small companies corporation tax by 2 percent.—

Mr. Bruce: rose—

Madam Speaker: Order. Is the Minister giving way?

Mr. McCartney: No.

Madam Speaker: That being the case, the hon. Member for South Dorset (Mr. Bruce) should resume his seat.

Mr.McCartney: We introduced a 10p increase in capital allowances for small firms, reduced vehicle excise duty for low-emission lorries, reduced the gas levy, increased tax allowances for film production and simplified gilt interest. Goodness, I am tired out—and that is only in the first seven months of a Labour Government.
What did we find when we came to power on 2 May? We found the social and economic effects of two recessions and record bankruptcies. We found that 250,000 companies had been forced to the wall since 1979 and a business had gone bust every three minutes of every working day since 1992. The Conservative party was not a party of business; it was a party of funny business. The Tories fiddled while the economy burned. They protected Asil Nadir when tens of thousands of small businesses went to the wall because of their economic incompetence.
In one in five working-age households in Britain, no one works. What was the Tories' answer? They fiddled the figures. A generation of young people and older workers were abandoned to the dole queue and social exclusion. The Tories created a sweatshop capital of Europe instead of an enterprise capital of Europe. They introduced a hire-and-fire culture: if someone was not willing to work for £1 or £1.20 an hour, there was always somebody else among the 3 million on the dole queue who would. Low pay or no pay was the Tories' cry. They created fat-cattery and took extra jobs themselves. Part-time Members of Parliament had two, three, four, five and even six directorships—because they claimed that they could not live on a Member of Parliament's salary—but they forced a million people in Britain to live on less than £2.50 an hour. Those are the double standards and hypocrisy of the Opposition.
The Tories raised interest rates to record levels. There was a recession in the construction industry and record low investment. Under the Tories, we had a record low share of world trade. They put up taxes for small businesses and increased regulation when they promised to cut it. Then they refused to help small and medium-sized enterprises that were crippled by late payments. The former Deputy Prime Minister boasted that that was how to do business. He said that he became a multi-millionaire by screwing small businesses into the ground. His attitude was, "I succeeded—to hell with them." That is what the Tories did in 18 years, and then


they left us £350 billion of debt—£6,000 for every citizen in the United Kingdom. The Tories were not economists: they were spivs and Arthur Daleys.
On 2 May, we took power and set about modernising this country. We are committed to strong, open and fair markets; economic and social renewal; partnership replacing conflict; and modern companies building a new country and a new Europe. Those are the consequences of the first seven months of a Labour Government. This Government believe in partnership and a valued role for employees and their trade unions. We are committed to the aims, roles and shared values of business. We support improved company cultures; performance and skill enhancement; the development of personal potential; the retention of skills and talent; the development of new skills and talent; investing in the work force; investing in research and development; the provision of minimum standards in the workplace; and training adaptable workers for flexible working environments. That is the difference between us and the Tories. What a contrast.
The right hon. Member for Wokingham (Mr. Redwood), the former Secretary of State for Wales, is the wannabe of British politics. He said, "I wannabe the leader of the Tory party," but when he first tried, he got 27 per cent. of the vote of the parliamentary party. He lost, but he tried again. He got 16 per cent. of the vote. After his performance tonight, I doubt that he would even get off the starting line. [Interruption.] The right hon. Gentleman does not want to be reminded of the shambles for which he and his colleagues were responsible over the past 18 years. The Labour Government have tried to start the process of change.
What does the Tory party find obnoxious about a Government policy which, in partnership with industry, will ensure positive effects in the labour market? We shall reject negative proposals that will hinder employment. We shall expand the mobility of the labour market by investing in skills. The problem under the Tories was that they refused to invest in skills. As a consequence, as the hon. Member for Eastleigh (Mr. Chidgey) pointed out, this country suffers from a skill shortage. This Government will invest in skills and opportunity.
This Government introduced a £3.5 billion Budget that will be the biggest investment in skills and opportunity that this country has ever seen. Some 250,000 people will be taken off the dole and given an opportunity, and £200 million will be invested in giving single parents employment opportunities. The Tories simply sneer. They do not give a damn. They are unconcerned about the future of young people in Britain. The Tories sneer at investment of £3.5 billion, but employers do not sneer. Record numbers of employers are joining the new deal to ensure, when it is introduced in January next year, that it will be the most successful job creation programme in this country's history.
Why do the Opposition oppose employers sitting down with their employees and this Government, to work out new policies to sustain small and medium-sized enterprises? Why are the Opposition so opposed to partnership? They believe simply in conflict, when this country needs a sense of stability and economic commitment—for people to be able to find work

throughout their working lives and to do the jobs on offer. Why is it that the Conservatives just cannot find the capacity—

Mr. Bercow: On a point of order, Madam Speaker. I ask for your guidance. Is it in order for a Minister at the Dispatch Box who has referred to an hon. Member to refuse to take an intervention from that Member?

Madam Speaker: It is possible for any hon. Member to do that. The Member who has the Floor has discretion as to whether to give way. The Minister seems to be in full flow, and he is not going to give way.

Mr. McCartney: In the past 10 years, Conservative Members have always thought that they could put me off by shouting at me, even when they were on Government Benches. Some day, they will learn their lesson. There is no possibility of Opposition Members putting me off, on any subject at any time, and they should learn that. Nor will I ever give way to right hon. and hon. Members who preach double standards and hypocrisy in this House. The hon. Member for Buckingham had three quarters of an hour to put his case, and he failed abysmally. I will not give way to him, when Labour Members who should have been able to speak were not allowed to. In fact, this is a first. I have never known an Opposition to filibuster their own motion as much as Conservative Members have done, but they did.
The former Secretary of State for Wales—I have to keep saying former Secretary of State, because I just love it—has become the No. 1 stalker of Ministers. He can be seen early in the morning at the back of the Department of Trade and Industry, scraping around in the bins looking for something that will get him a quick headline. I am getting a little concerned for him as the winter weather comes on. May I suggest this to him? Do not hang around the back, but come in the front. We shall give him a cup of tea and, as we have always done since day one of this Government, we shall answer every question that he puts to us.

Mr. Ian Bruce: On a point of order, Madam Speaker. I know that the Minister would not want to mislead the House. I have just checked the record of the Doorkeeper, and my hon. Friend the Member for Buckingham (Mr. Bercow) spoke for 20 minutes. Clearly, the Minister cannot count that far. If he thinks that 20 minutes is 45, he should not be in that office.

Madam Speaker: The hon. Member for Buckingham (Mr. Bercow) spoke for 20 minutes. I have it here. I also know how many points of order the hon. Member for South Dorset (Mr. Bruce) has raised—too many.

Mr. McCartney: To return to the issues at stake, Opposition Members spent a great deal of time on their favourite subject—attacking Europe. As we reach the close of the debate, perhaps I can help them. We are considering a new directive, protecting endangered species living out of their natural habitats. What could be more relevant to Conservative Members who, on 1 May, were driven out of Scotland and out of Wales, and were recently driven out of Winchester? To make things a little easier for themselves, they drove themselves out of Leominster.
The Opposition spokesman, the hon. Member for Sevenoaks, said that the Conservatives were the party of business. I can remember the Moms Minor—The Austin Morris. Last week, the Tories created a new model, the Temple-Morris. No matter how hard one tries to steer it, it just will not turn right, and neither will we.
We reject the Opposition motion. We ask hon. Members to vote for modernisation, renewal and partnership. Let us rebuild this country and give young people job opportunities. Let us get the long-term unemployed off the dole. Let us work in partnership with business to invest in training and education, research and development. Let us give Britain a major voice in Europe.
What people need in Europe is a Labour Government committed to employability, getting unemployment down and improving social justice, so that everyone has an opportunity to participate. We won the general election on the basis that we were the party of the many and the Tories were the party of the few. Today's debate showed that in spades. We remain the party of the many, and they remain the party of the few.

Mr. James Arbuthnot: rose in his place and claimed to move, That the Question be now put.

Question, That the Question be now put, put and agreed to.

Question put accordingly, That the original words stand part of the Question:—

The House divided: Ayes 129, Noes 326.

Division No 102]
[9.59 pm


AYES


Ainsworth, Peter (E Surrey)
Fallon, Michael


Amess, David
Flight, Howard


Arbuthnot, James
Forth, Rt Hon Eric


Atkinson, Peter (Hexham)
Fox, Dr Liam


Baldry, Tony
Gale, Roger


Bercow, John
Garnier, Edward


Beresford, Sir Paul
Gibb, Nick


Blunt, Crispin
Gill, Christopher


Body, Sir Richard
Gillan, Mrs Cheryl


Boswell, Tim
Gorman, Mrs Teresa


Bottomley, Peter (Worthing W)
Gray, James


Bottomley, Rt Hon Mrs Virginia
Green, Damian


Brady, Graham
Greenway, John


Brazier, Julian
Grieve, Dominic


Browning, Mrs Angela
Hague, Rt Hon William


Bruce, Ian (S Dorset)
Hamilton, Rt Hon Sir Archie


Burns, Simon
Hammond, Philip


Butterfill, John
Hawkins, Nick


Cash, William
Heath, Rt Hon Sir Edward


Chope, Christopher
Heathcoat-Amory, Rt Hon David


Clark, Rt Hon Alan (Kensington)
Heseltine, Rt Hon Michael


Clarke, Rt Hon Kenneth (Rushcliffe)
Hogg, Rt Hon Douglas



Horam, John


Collins, Tim
Howard, Rt Hon Michael


Cormack, Sir Patrick
Howarth, Gerald (Aldershot)


Cran, James
Hunter, Andrew


Curry, Rt Hon David
Jenkin, Bernard


Davies, Quentin (Grantham)
Johnson Smith, Rt Hon Sir Geoffrey


Davis, Rt Hon David (Haltemprice)



Day, Stephen
Key, Robert


Dorrell, Rt Hon Stephen
King, Rt Hon Tom (Bridgwater)


Duncan, Alan
Kirkbride, Miss Julie


Emery, Rt Hon Sir Peter
Laing, Mrs Eleanor


Evans, Nigel
Lait, Mrs Jacqui


Faber, David
Lansley, Andrew


Fabricant, Michael
Letwin, Oliver





Lewis, Dr Julian (New Forest E)
Shepherd, Richard


Lidington, David
Simpson, Keith (Mid-Norfolk)


Lilley, Rt Hon Peter
Soames, Nicholas


Lloyd, Rt Hon Sir Peter (Fareham)
Spelman, Mrs Caroline


Loughton, Tim
Spicer, Sir Michael


Luff, Peter
Spring, Richard


Lyell, Rt Hon Sir Nicholas
Steen, Anthony


MacGregor, Rt Hon John
Streeter, Gary


MacKay, Andrew
Swayne, Desmond


Maclean, Rt Hon David
Syms, Robert


McLoughlin, Patrick
Tapsell, Sir Peter


Madel, Sir David
Taylor, Ian (Esher & Walton)


Malins, Humfrey
Taylor, Sir Teddy


Maples, John
Tredinnick, David


Maude, Rt Hon Francis
Tyrie, Andrew


Mawhinney, Rt Hon Sir Brian
Viggers, Peter


May, Mrs Theresa
Walter, Robert


Moss, Malcolm
Waterson, Nigel


Ottaway, Richard
Wells, Bowen


Paice, James
Whitney, Sir Raymond



Whittingdale, John


Paterson, Owen
Widdecombe, Rt Hon Miss Ann


Prior, David
Wilkinson, John


Randall, John
Willetts, David


Redwood, Rt Hon John
Winterton, Mrs Ann (Congleton)


Robathan, Andrew
Winterton, Nicholas (Macclesfield)


Robertson, Laurence (Tewk'b'ry)
Yeo, Tim


Roe, Mrs Marion (Broxbourne)
Young, Rt Hon Sir George


Rowe, Andrew (Faversham)



Ruffley, David
Tellers for the Ayes:


St Aubyn, Nick
Mr. John M. Taylor and


Sayeed, Jonathan
Mr. Oliver Heald.




NOES


Abbott, Ms Diane
Campbell, Mrs Anne (C'bridge)


Adams, Mrs Irene (Paisley N)
Campbell, Menzies (NE Fife)


Ainsworth, Robert (Cov'try NE)
Campbell-Savours, Dale


Alexander, Douglas
Cann, Jamie


Allan, Richard
Caplin, Ivor


Allen, Graham
Casale, Roger


Anderson, Donald (Swansea E)
Caton, Martin


Armstrong, Ms Hilary
Chapman, Ben (Wirral S)


Ashton, Joe
Chaytor, David


Atkins, Charlotte
Chidgey, David


Ballard, Mrs Jackie
Chisholm, Malcolm


Banks, Tony
Clapham, Michael


Barron, Kevin
Clark, Rt Hon Dr David (S Shields)


Bayley, Hugh
Clark, Dr Lynda (Edinburgh Pentlands)


Beard, Nigel



Beckett, Rt Hon Mrs Margaret
Clark, Paul (Gillingham)


Begg, Miss Anne
Clarke, Charles (Norwich S)


Beith, Rt Hon A J
Clarke, Eric (Midlothian)


Benn, Rt Hon Tony
Clarke, Rt Hon Tom (Coatbridge)


Bennett, Andrew F
Clelland, David


Benton, Joe
Clwyd, Ann


Berry, Roger
Coaker, Vernon


Best, Harold
Coffey, Ms Ann


Betts, Clive
Coleman, Iain


Blears, Ms Hazel
Colman, Tony


Blizzard, Bob
Connarty, Michael


Blunkett, Rt Hon David
Cook, Frank (Stockton N)


Boateng, Paul
Cooper, Yvette


Borrow, David
Corbett, Robin:


Bradley, Keith (Withington)
Cotter, Brian


Bradshaw, Ben
Cousins, Jim


Brand, Dr Peter
Cranston, Ross


Breed, Colin
Crausby, David


Brinton, Mrs Helen
Cryer, John (Hornchurch)


Brown, Rt Hon Nick (Newcastle E)
Cummings, John


Brown, Russell (Dumfries)
Cunningham, Rt Hon Dr John (Copeland)


Bruce, Malcolm (Gordon)



Burden, Richard
Cunningham, Jim (Cov'try S)


Butler, Mrs Christine
Dafis, Cynog


Byers, Stephen
Dalyell, Tam


Caborn, Richard
Darting, Rt Hon Alistair


Campbell, Alan (Tynemouth)
Davey, Edward (Kingston)






Davey, Valerie (Bristol W)
Johnson, Alan (Hull W & Hessle)


Davidson, Ian
Johnson, Miss Melanie (Welwyn Hatfield)


Davies, Rt Hon Denzil (Llanelli)


Davies, Geraint (Croydon C)
Jones, Mrs Fiona (Newark)


Dawson, Hilton
Jones, Helen (Warrington N)


Dean, Mrs Janet
Jones, Jon Owen (Cardiff C)


Dobbin, Jim
Jones, Martyn (Clwyd S)


Donohoe, Brian H
Jowell, Ms Tessa


Doran, Frank
Kaufman, Rt Hon Gerald


Dunwoody, Mrs Gwyneth
Keeble, Ms Sally


Eagle, Angela (Wallasey)
Keen, Alan (Feltham & Heston)


Eagle, Maria (L'pool Garston)
Keen, Ann (Brentford & Isleworth)


Edwards, Huw
Kelly, Ms Ruth


Ellman, Mrs Louise
Kemp, Fraser


Ennis, Jeff
Kennedy, Charles (Ross Skye)


Fatchett, Derek
Kennedy, Jane (Wavertree)


Fearn, Ronnie
Khabra, Piara S


Field, Rt Hon Frank
Kilfoyle, Peter


Fisher, Mark
King, Andy (Rugby & Kenilworth)


Fitzpatrick, Jim
King, Ms Oona (Bethnal Green)


Flint, Caroline
Kumar, Dr Ashok


Follett, Barbara
Ladyman, Dr Stephen


Foster, Rt Hon Derek
Lawrence, Ms Jackie


Foster, Michael Jabez (Hastings)
Laxton, Bob


Foster, Michael J (Worcester)
Leslie, Christopher


Foulkes, George
Levitt, Tom


Gapes, Mike
Lewis, Terry (Worsley)


Gardiner, Barry
Linton, Martin


George, Bruce (Walsall S)
Llwyd, Elfyn


Gerrard, Neil
Love, Andrew


Gibson, Dr Ian
McAllion, John


Gilroy, Mrs Linda
McAvoy, Thomas


Godsiff, Roger
McCabe, Steve


Gordon, Mrs Eileen
McCafferty, Ms Chris


Gorrie, Donald
McCartney, Ian (Makerfield)


Grant, Bernie
McDonagh, Siobhain


Griffiths, Jane (Reading E)
Macdonald, Calum


Griffiths, Nigel (Edinburgh S)
McDonnell, John


Griffiths, Win (Bridgend)
McFall, John


Grocott, Bruce
Mclsaac, Shona


Grogan, John
MacShane, Denis


Gunnell, John
Mactaggart, Fiona


Hall, Mike (Weaver Vale)
McWalter, Tony


Hall, Patrick (Bedford)
McWilliam, John


Hanson, David
Mahon, Mrs Alice


Harris, Dr Evan
Mallaber, Judy


Harvey, Nick
Mandelson, Peter


Heal, Mrs Sylvia
Marek, Dr John


Healey, John
Marsden, Gordon (Blackpool S)


Henderson, Doug (Newcastle N)
Marshall-Andrews, Robert


Henderson, Ivan (Harwich)
Martlew, Eric


Hepburn, Stephen
Maxton, John


Heppell, John
Meale, Alan


Hesford, Stephen
Michael, Alun


Hill, Keith
Michie, Bill (Shef'ld Heeley)


Hodge, Ms Margaret
Michie, Mrs Ray (Argyll & Bute)


Hoey, Kate
Milburn, Alan


Hood, Jimmy
Miller, Andrew


Hoon, Geoffrey
Mitchell, Austin


Hope, Phil
Moffatt, Laura


Hopkins, Kelvin
Moonie, Dr Lewis


Howarth, Alan (Newport E)
Moran, Ms Margaret


Howarth, George (Knowsley N)
Morgan, Ms Julie (Cardiff N)


Howells, Dr Kim
Morgan, Rhodri (Cardiff W)


Hoyle, Lindsay
Moriey, Elliot


Hughes, Kevin (Doncaster N)
Morris, Ms Estelle (B'ham Yardley)


Humble, Mrs Joan
Morris, Rt Hon John (Aberavon)


Hurst, Alan
Mudie, George


Hutton, John
Mullin, Chris


Iddon, Dr Brian
Murphy, Denis (Wansbeck)


Illsley, Eric
Murphy, Jim (Eastwood)


Ingram, Adam
Norris, Dan


Jackson, Ms Glenda (Hampstead)
O'Brien, Mike (N Warks)


Jackson, Helen (Hillsborough)
Olner, Bill





O'Neill, Martin
Southworth, Ms Helen


Öpik, Lembit
Spellar, John


Organ, Mrs Diana
Squire, Ms Rachel


Osborne, Ms Sandra
Starkey, Dr Phyllis


Palmer, Dr Nick
Steinberg, Gerry


Pearson, Ian
Stevenson, George


Pendry, Tom
Stewart, David (Inverness E)


Pickthall, Colin
Stewart, Ian (Eccles)


Pike, Peter L
Stinchcombe, Paul


Pollard, Kerry
Stoate, Dr Howard


Pope, Greg
Strang, Rt Hon Dr Gavin


Pound, Stephen
Stringer, Graham


Powell, Sir Raymond
Stunell, Andrew


Prentice, Ms Bridget (Lewisham E)
Sutcliffe, Gerry


Prentice, Gordon (Pendle)
Taylor, Rt Hon Mrs Ann (Dewsbury)


Prescott, Rt Hon John



Primarolo, Dawn
Thomas, Gareth (Clwyd W)


Purchase, Ken
Timms, Stephen


Quin, Ms Joyce
Tipping, Paddy


Radice, Giles
Todd, Mark


Rapson, Syd
Touhig, Don


Raynsford, Nick
 Trickett, Jon


Reed, Andrew (Loughborough)
 Truswell, Paul


 Reid, Dr John (Hamilton N)
Turner, Dennis (Wolverh'ton SE)


Rendel, David
 Turner, Desmond (Kemptown)


Roche, Mrs Barbara
Turner, Dr George (NW Norfolk)


Rogers, Allan
Twigg, Derek (Halton)


Rooker, Jeff
Twigg, Stephen (Enfield)


Tyler, Paul


Rooney, Terry
Wallace, James


Ross, Ernie (Dundee W)
Ward, Ms Claire


Rowlands, Ted
Wareing, Robert N


Ruane, Chris
Watts, David


Russell, Bob (Colchester)
Webb, Steve


Ryan, Ms Joan
Whitehead, Dr Alan


Salter, Martin
Williams, Rt Hon Alan (Swansea W)


Sanders, Adrian


Savidge, Malcolm
Williams, Alan W (E Carmarthen)


Sawford, Phil
Williams, Mrs Betty (Conwy)


Sedgemore, Brian
Willis, Phil


Shaw, Jonathan
Wills, Michael


Sheerman, Barry
Winterton, Ms Rosie (Doncaster C)


Sheldon, Rt Hon Robert
Wise, Audrey


Simpson, Alan (Nottingham S)
Wood, Mike


Singh, Marsha
Woolas, Phil


Skinner, Dennis
Wright, Anthony D (Gt Yarmouth)


Smith, Rt Hon Andrew (Oxford E)
Wright, Dr Tony (Cannock)


Smith, Rt Hon Chris (Islington S)
Wyatt, Derek


Smith, Jacqui (Redditch)



Smith, John (Glamorgan)
Tellers for the Noes:


Smith, Llew (Blaenau Gwent)
Mr. Jim Dowd and


Soley, Clive
Mr. David Jamieson.

Question accordingly negatived.

Question, That the proposed words be there added,put forthwith, pursuant to Standing Order No. 31 (Questions on amendments), and agreed to.

MADAM SPEAKER forthwith declared the main Question, as amended, to be agreed to.

Resolved,
That this House welcomes the speedy action taken by Her Majesty's Government to foster an environment in which business can flourish, with macro-economic stability, low rates of corporation tax, a clear new competition policy, and a review of utility regulation; contrasts this with the boom and bust policies of the previous administration which led to the collapse of thousands of firms and unemployment for millions; and welcomes Her Majesty's Government's partnership with business to improve UK competitiveness.

WELSH GRAND COMMITTEE

Motion made, and Question put forthwith, pursuant to Standing Order No. 108 (Welsh Grand Committee (Sittings)),
That the Welsh Grand Committee shall meet at Westminster on Tuesday 16th December at half-past Ten o'clock to take questions under Standing Order No. 103 (Welsh Grand Committee (questions for oral answer)), and to consider the matter of government expenditure in Wales in 1998–99 under Standing Order No. 107 (Welsh Grand Committee (matters relating exclusively to Wales)).—[Mr. Pope.]

Question agreed to.

Education (Hackney)

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Pope.]

Mr. Brian Sedgemore: rose—

Madam Speaker: Order. Will hon. Members please move away from the Bar as there is an hon. Member who wishes to speak.

Mr. Sedgemore: I should like to begin this debate by congratulating children and teachers in Hackney on their sustained and steady improvement in achievement in the 1990s. Whereas in 1990 only 14 per cent. of pupils obtained more than five GCSE grades A to C, in 1996 that figure had risen to 31 percent. This year, the improvement in the grades was one of the best in the country. Better still, The Observer showed in a comprehensive survey that two Hackney schools, Clapton school and Haggerston school, were in the top 10 schools when value added was measured. I say well done to everyone concerned.
There is no contradiction between praise for those achievements and a recognition that the Office for Standards in Education report earlier this year was right to say that there were too many schools in Hackney that were performing badly—after all, one badly performing school is one too many. The Ofsted report was also right to say that the administration of education in Hackney was in a state of turmoil that could only be characterised as chaos. It was also right to report that things had become much more chaotic since the Liberal Democrats and Tories had taken control of the council, 18 months earlier. The blame lies with Councillor Kevin Daws, the leader of the Liberal Democrats, and Councillor Joe Lobenstein, the leader of the Tories. Those two councillors are living proof of George Villiers's aphorism:
The world is made up for the most part of fools and knaves.
Faced with that situation, I have no hesitation in saying that the only course open to the Government was to intervene directly, despite their limited legal powers, to help Hackney's schoolchildren. The Government's intervention was welcomed by teachers, parents and school governors. It is the considered view of most people—myself included—that the Minister for School Standards, who will reply to the debate, handled the intervention with great skill and sensitivity. I was present when he met head teachers in Hackney and can therefore pay tribute to his understanding, knowledge and professionalism. We were all impressed.
The improvement team that was sent in came up with some good suggestions. One of its members, Pat Collarbone, the former head teacher of Haggerston school for girls, is known to me, and I have the greatest respect for her ability. The team produced an education structure that valued the work of teachers and recognised that providing a service for education cannot be carried out in the same way as providing a service for refuse collection—there is a qualitative difference.
However, the alarm bells rang in Hackney, Whitehall and Westminster when Tony Elliston, Hackney council's chief executive, announced on the radio that he was


prepared to go to war with the Government over the future of Hackney's education services. Tony Elliston is an unelected bureaucrat, yet here he was entering the political arena and declaring war on the most popular Government in history, without consulting the council's education committee or the full council.
In acting as a politician and usurping the role of elected politicians, he made a mockery of the notion of the public service ethos; he was also clearly in breach of the express and/or implied terms of his contract and in breach of the Widdecombe rules, which forbid senior local government officers to enter the political arena publicly. He let the people of Hackney down and lost their confidence. In his startling broadcast, he sounded like a man who had just had electro-shock therapy that had gone wrong—as though his brain was about to explode.
Ministers were right to respond by insisting that, whatever the chief executive thought, the council should employ a new director of education on the salary recommended by the improvement team. However, that still leaves open two questions: why did the chief executive allow chaos to develop in the education department and why was he unwilling to put it right? Why did the first, second and third-tier officers leave the education department during Elliston's reign of chaos? Was it only because he became obsessed with vacuous sociological jargon that was described by the National Union of Teachers' representative, Mark Lushington, as
the toxic waste of American management theory circa 1975
which
reads like a menu for a Harvester restaurant
and which was viewed by head teachers as plain idiotic?
Or was it because Tony Elliston, Hackney's chief executive, is a public school bully masquerading as an East End barrow boy who has nowhere to go but Hackney because he has exposed himself as unemployable elsewhere? He seems to believe that he can bully and threaten people into accepting his crude solutions to problems. Chief executives from other boroughs have told me that he has not tried to adapt his new management structure to Hackney's needs. I have written to him about Hackney's education services, but all I get in reply is that sinful pride which Alexander Pope characterised as
the never failing vice of fools".
It is my considered view that bullies and fools such as Mr. Elliston have to be faced down. Just as the bully boy in the playground has to be excluded if he does not mend his ways, so the bully boy in charge of Hackney council should, if he does not change his ways, be excluded from public life.
It is deeply regrettable that when talking about education the chief executive should have demonstrated a vulgar streak which debased and demeaned our borough and brought it into hatred, ridicule and contempt. You probably will not believe this, Mr. Deputy Speaker, but last week I was browsing in the Library through a magazine called "PR Week", of which I have a copy with me. Speaking of what he described as "maverick teachers" in Hackney, Tony Elliston, at a meeting of the Institute of Public Relations, said:
Hackney is always in the said. It's just a question of how deep it is'.

Speaking, furthermore, about Ms Lorraine Langham, an executive director of the council, he said:
Lorraine's approach to the media is that you can't polish a turd.
Where else in Britain is there a chief executive who refers to his council staff as shit? Does his executive director really use the schoolboy language of bodily functions when she speaks to the chief executive? And how does any of this help our schoolchildren who get only one chance in life? Perhaps Liberal Democrat leader Councillor Daws and Tory leader Joe Lobenstein, who support the chief executive in his filth, can tell us.
When the chaos was at its height in Hackney's education department I went to see one of the officers, Mohamed Mehmet. By then, the director of education, Gus John, had been driven out of his post, all the second-tier officers had gone, and Mohamed, who was about to leave, was the last of the third tier officers. It was like being on a beachhead where the battle plan had gone wrong. All around was desolation, and as the bright Byronic sun of the beachhead disappeared behind the clouds, the wind withered in the stagnant air, the waves died, the tides returned to their graves, and darkness became the universe. A whole department had been destroyed, morale had been sapped and Mohamed was getting out before he took the hit for everything that was wrong.
The new management structure prepared for Hackney by the chief executive is based on the dumbing down of intelligence, professionalism and specialist expertise. It was rejected by head teachers, governors, the National Union of Teachers and Labour councillors. Amazingly, for the first time in history the head teachers and the NUT found themselves on the same side of an industrial dispute—between the chief executive and the Government.
The great virtue of the work of the improvement team was that, for the first time in the history of Hackney education, everyone was consulted and everyone agreed—except for the chief executive and a couple of political parties motivated by malice.
I ask the Minister of State to make it clear in the immediate future that the work of the improvement team has his full confidence, and that it should not be deflected from its task of doing the best that it can for the future of Hackney's children. Everything that the local education authority does must be geared to that end, and that end only. Any help and resources that the Government can give to meeting that goal will be much appreciated. More resources really are needed.
Unfortunately, some of the administrative and political problems will not be overcome until the local elections in May 1998, when Labour will be returned to power. Political stability combined with common sense will then return. I suspect that, come May 1998, the advice of the Secretary of State for the Environment, Transport and the Regions will be sought on the proper method of getting rid of a recalcitrant chief executive.
For too long, too many people have played politics with the lives of Hackney's schoolchildren. It now behoves us all to raise our expectations and our performance in relation to their needs.

Ms Diane Abbott: I associate myself with the remarks of my hon. Friend the Member for Hackney, South and Shoreditch (Mr. Sedgemore) and especially with his closing remark that for too long people have played politics with Hackney schoolchildren. However, the main thing that I want to do in the few minutes available to me is to emphasise the amount of positive work going on in Hackney schools and the fact that very many teachers and very many children are still achieving, still doing their best in difficult circumstances.
When I first read in the newspaper that a hit squad was coming into Hackney schools, I was a little worried, because although those of us who are familiar with the position now know that the hit squad was coming to address problems at the centre, the press coverage at the time gave the sad impression that all schools in Hackney were failing. That was very unfortunate. One of the problems that we have in Hackney is a flight of parents once their children reach the age of 11 because of the poor reputation—undeserved, I believe—of secondary schools in Hackney.
Like many parents, I have difficulty with the policy of naming and shaming because, ultimately, we are naming and shaming not the school but the children. Not so long ago, I visited Morningside school in Hackney. Teachers told me that, the day after Morningside was plastered all over The Evening Standard as one of the worst schools in the country, the atmosphere in the school was like a morgue. We must have a care with policy, because the people who bear the burden of the stigma are the children in the schools.
The hit squad is at work now, and my hon. Friend the Member for Hackney, South and Shoreditch is right to say that it has the support of teachers, councillors and parents in playing its part to improve education in Hackney. However, in a borough like Hackney, with the fourth highest unemployment in the country, with the one of the highest numbers of single parents in the country and with some of the worst housing in the country, education and achievement can never be satisfactorily addressed unless issues of poverty are also addressed and unless a policy of redistributing wealth is also considered.
I am not a class determinist when it comes to education; I do not believe that working-class children cannot achieve because they are working-class. I come from a working-class immigrant background and went to Cambridge university—a rather politically incorrect thing to admit nowadays. If children in Hackney are to achieve all that I know they can achieve, Hackney will need more resources and support and it will need policies to tackle the poverty and poor housing that we have in Hackney.
My hon. Friend the Member for Hackney, South and Shoreditch mentioned Clapton school for girls. It is actually one of the most improving schools in the country. I am very sad that the council is now talking about turning it into a mixed school. There is a history of educating girls on that site dating from the 19th century. I realise the difficulties in Hackney and I realise the pressures for more mixed-sex schools, but Clapton school for girls has an important history of educating girls. There are not that many schools in Hackney with a positive history. It is a good school.
Clapton school for girls educates substantial numbers of Muslim girls; a mosque has been built a stone's throw from it precisely because the community wants the girls to attend that school. I fear that, if the school is turned into a mixed-sex school, Muslim parents will withdraw their girls and there will be pressure for a single-sex Muslim girls' school in Hackney, which would be a backward step.
It is to the credit of schools in Hackney that they are able to educate so many children from so many different creeds and backgrounds together in one system. The decision to turn Clapton school for girls into a mixed-sex school is wrong. It will be detrimental and I believe that it will give rise to pressure for single-sex Muslim schools. Clapton school for girls should continue to be a school for girls.
As I have said, with all the politics and media hype we must remember that children, parents and teachers in Hackney are doing their level best. I should like that to be acknowledged in the House today.

The Minister for School Standards (Mr. Stephen Byers): I am glad to have the opportunity to deal with the question of education in the London borough of Hackney. I congratulate my hon. Friend the Member for Hackney, South and Shoreditch (Mr. Sedgemore) on securing the opportunity to debate the issue this evening. I also congratulate him on being a constant supporter of the Government's decision to establish the improvement team and on being an assiduous attender at the various meetings that have been held to consider the way forward for education in Hackney in these most difficult times.
I noted the comments made by my hon. Friend the Member for Hackney, North and Stoke Newington (Ms Abbott), especially towards the end of her speech. I guarantee that we will take her concerns into account should the Government be in a position to respond to any reorganisation proposals from Hackney.
As both my hon. Friends said clearly, the Government are concerned about the 30,000 children who get only once chance of a good education. I want to take this opportunity to say, on behalf of the Government, that many schools in Hackney are doing good work, often under difficult circumstances. I am pleased to put that on the record.
When I met the head teachers of Hackney—all 69 of them—just a week or two after we established the improvement team, I was struck by their commitment and motivation. As I come from a local government background myself, I thought of how much more they could do if they had the support and assistance of a good local education authority. They have been denied that. I happen to believe—I know that the Opposition disagree with this—that a local education authority that works well adds value to what its schools can do. It is a great shame that the schools in Hackney have not had that support.
I reinforce the points made by my hon. Friend the Member for Hackney, North and Stoke Newington: there are difficult circumstances in Hackney. It is one of the most impoverished urban areas in western Europe. In 1993, one third of all Hackney households had a gross income of under £5,000. Two thirds of households have no car; two thirds of children in Hackney secondary


schools take free school meals, the highest number in the country; and Hackney has the highest rate of unemployment in London.
The Government believe that children of unemployed or impoverished parents do not have to do badly in school—education should be their ladder of opportunity into work and off welfare, the wage slip replacing the giro cheque. Poverty should not be an excuse for failure, but a reason for targeted support and assistance. Children in Hackney, perhaps above children in all other parts of the country, deserve the highest-quality teaching, just as their teachers deserve the best possible support.
I acknowledge that the LEA in Hackney faces an immense challenge, but the magnitude of that challenge does not and will not excuse the provision of an inadequate service. On taking office in May, I asked for an analysis of the performance of all LEAs. That was an exercise distinct from the review of the performance of individual schools.
One LEA above all others gave us cause for concern—Hackney. As a result, we invited the Office for Standards in Education to inspect the authority. It agreed, and Hackney accepted. Ofsted was originally due to report at the end of this year, but it was so concerned at what it discovered that it brought its report forward and published it on 18 September. The report's conclusions were damning. Ofsted said:
The current position is unacceptable. Some significant statutory duties are not being met.
What needs to be done is, in fact, very clear. If Hackney children are to realise their potential, then the Authority must, above all else, act to raise standards in literacy and numeracy and focus on the needs of those pupils whose first language is not English".
It concluded by saying:
The LEA is in a state of disarray.
The Government would have failed in their responsibilities if they had not acted on the basis of those clear recommendations. We were not going to stand to one side, turn our backs on the children of Hackney and see them made the innocent victims of administrative and political failure, so the Secretary of State for Education and Employment established an improvement team under the leadership of Richard Painter.
There were concerns about the establishment of that team and, given some of the press reports before it was even appointed, I understand why. It has sought throughout to bring parties together, particularly governors, teachers and head teachers, in the interests of the children of Hackney. It has succeeded in doing that.
We gave the improvement team a remit, first, to ensure that Hackney met its statutory responsibilities; secondly, to work with head teachers and officers of the authority to prepare an education development plan; thirdly, to review urgently the LEA's management structure. We had no power to force the team on Hackney, as we had no power to require an inspection of the LEA by Ofsted. At all stages, the co-operation and agreement of Hackney has been necessary.
It is regrettable that the previous Government failed to provide legal backing to efforts to raise standards, particularly in relation to LEAs. This Government are prepared to take action to give themselves those legal

powers, which is why, later this week, we will publish a measure to allow us to intervene directly in LEAs that are failing to provide an adequate education for the children for which they have responsibility. Next year, Ofsted will begin a regime of LEA inspection, starting with 12 LEAs that will be inspected during 1998.
There is no doubt that, over the past few weeks, there have been periods of frustration for the improvement team and for all of us who are concerned about the education of children in Hackney, but I am pleased that the Hackney LEA has now accepted the team's recommendation of the appointment of a director of education at a salary that should attract quality applicants. The post was advertised last week and the appointment should be made by the middle of January 1998. At the request of the team, head teachers and chairs of governors will be involved in the recruitment process.
That is a vital breakthrough, ensuring that those who have responsibility for the day-to-day delivery of a quality education—the teachers, head teachers and chairs of governors—are involved in the appointment of a director of education for Hackney, but it is not enough. The team will vet all shortlisted applicants. For the reasons outlined by my hon. Friend the Member for Hackney, South and Shoreditch, we do not have confidence in the present administration making a suitable appointment, which is why the Secretary of State will approve the final shortlist. We need that power. I am pleased that Hackney has agreed that we should have the final say.
We have been pleased by the high level of co-operation throughout between the improvement team, many local education authority staff, head teachers, chairs of governors and the unions—not just the teacher unions, but those representing non-teaching staff. It is a long time since there has been liaison in Hackney at that level with the single aim of securing a better education for the young people of the borough.
A good example of that working together has been the discussions about the uses for the Government's £1.25 million of new capital money to be spent between now and March 1998 as part of our new deal for schools. Some head teachers have accepted that their schools will not benefit this time because there are other more pressing cases. That says a lot about co-operation among Hackney head teachers. The money will improve the condition of buildings to create an environment for quality education. I look forward to working with the head teachers and the improvement team to ensure that Hackney will benefit again from round two of the new deal for schools capital money in 1998–99.
Those are positive developments. The improvement team is to be congratulated on sticking to its task, often in the face of resistance and hostility. However, it tells me of its concern about the projected deficit of approximately £3 million in Hackney's education budget for the current financial year. That follows a substantial deficit in 1996–97. The improvement team has raised the matter directly with the elected members of the local education authority. Later this week, a joint meeting will be held to determine what action needs to be taken.
The district auditor is also concerned about overspend in other service areas. We shall monitor the situation closely. We expect elected councillors to take positive action to discharge their responsibilities.
There were 30,000 reasons why the Government set up the improvement team—the 30,000 schoolchildren in Hackney. We would have intervened more directly and more strongly if we had had the legal powers. When we have those powers, we shall use them in similar situations. Working with councillors, being prepared to put old dogmas and prejudice to one side and putting the children of Hackney first, the improvement team, with the Government's support, will seek quality

education. Next time we debate Hackney and its education service, I hope that it will be to celebrate the success of its schools—as we have done this evening—supported by a regenerated local education authority and assisted by a Government that regard education as the top priority.

Question put and agreed to.

Adjourned accordingly at seventeen minutes to Eleven o'clock.